The Impact of Educational Assortative Mating on Income Inequality: Evidence from Argentina

Abstract

This paper seeks to quantify the impact of educational assortative mating on income inequality among households in Argentina. We use microdata from two household surveys conducted by the National Institute of Statistics and Census: The Permanent Household Survey and the National Survey of Risk Factors. We construct contingency tables and perform a regression analysis to study the existence of educational assortative mating. We also present counterfactual simulations of random re-matching of observations. The results show that a sizeable proportion of couples are educationally homogamous (45%). Comparing the Gini coefficients calculated in the real matching and the simulated scenarios, we observe a reduction of up to 4 points. Thus, the educational assortative mating represents a relevant dimension to explain income inequality. Our results recommend considering this matching pattern when defining optimal income taxes; this is, if there is a high positive covariance between the income of both members of the couple, it seems appropriate, from a redistributive point of view, to define income taxes at the household level and not at the individual level (as is currently the case in most countries, including Argentina).