Abstract
Positive assortative matching in terms of traits like ethnicity, race and personality has been prevalent in marital formation. One possible explanation for this is that spouses in endogamous marriages have complementary skills and tastes that increase marital surplus. This paper aims to estimate the effects of ethnic assortative matching on a variety of household outcomes by using the exogenous variation in immigrant flows in the United States during the period 1900-1930 to disentangle the selection effect of partners. The major finding is that the complementarities in home production from same ethnic marriage enhance investment in household public goods such as childrearing and home ownership and reduce the market labor supply of wives. OLS estimates of this effect appear to be substantially biased downward, indicating positive selection into intermarriage in terms of unobservable traits that increase marital surplus.
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