Educational homogamy and earnings inequality of married couples: Urban China, 1988-2007

Using data from the urban sample of the Chinese Household Income Project in 1988, 1995, 2002, and 2007, we examine the association between increasing educational homogamy and rising earnings inequality of married couples. Using methods of counterfactual decomposition and random mating, we reveal that, over the years, increasing educational homogamy among urban married couples with senior high school and tertiary-level education is associated with a growing inter-household earnings gap and reduced intra-household earnings inequality. These two types of inequalities, in combination, have driven down the overall earnings inequality of married couples. This study highlights a demographic mechanism between large-scale institutional transition and increasing economic inequality in China, and helps understand the inequality formation process, especially in developing societies where mate selection patterns undergo rapid change as a result of improvement in educational attainment. (C) 2015 Elsevier Ltd. All rights reserved.