High earners tend to marry other high earners, while low earners are more likely to marry other low earners. What social scientists call “assortative mating” can worsen income inequality, says Alexander P. Frankel, assistant professor of economics and Richard N. Rosett Faculty Fellow at Chicago Booth. To address the problem, Frankel suggests that in countries with high levels of assortative mating, governments should tax married individuals separately.
How high does the level of assortative mating have to be such that countries would be better off taxing couples separately? Frankel’s model proposes a cutoff point.
Alexander P. Frankel, “Taxation of Couples under Assortative Mating,” American Economic Journal: Economic Policy, forthcoming.