Econ homework: All the single ladies

I am taking several intro economics MOOCs online through Coursera. One class, Microeconomics Principles, taught by José Vázquez-Cognet of the University of Illinois, requires weekly posts to a class discussion forum. I’ll cross-post those contributions here. For the first week, we had to discuss a market in romantic relationships using principles of supply and demand and data on the sex ratio for some population.

The sex ratio for African-Americans ages 25 to 29 is 0.85. It is even lower for young African-Americans who hold at least a bachelor’s degree: 0.60. (Data from U.S. Census Bureau.) With the supply of highly-educated black men so low in comparison to black women’s presumed demand for them as romantic partners, it is not surprising to read accounts of the costs black women must pay in the market for romantic relationships: everything from putting up with nagging parents to remaining single.

Why is the sex ratio so low among young African-Americans? One big reason is incarceration. Beginning with the 1980s “war on drugs,” America has attempted to deal with many social problems through the criminal justice system (instead of, for example, education). As a result, the US has the highest rate of adult incarceration in the world. Most American prisoners are men, and there are huge disparities in the incarceration rates of each race. African-American men are incarcerated at the highest rate, with about 10% in prison or under another form of judicial supervision (e.g., probation) at any given time. Imprisoned men cannot participate in the marriage market, and even once they return to society, their educational and job prospects remain low.

The relationship market among young, well-educated African-Americans is thus characterized by a steep supply curve, with a high “cost” to women of finding a similarly-educated man. One way to think about the cost is in the pressure on black women to “marry down,” to seek relationships with black men with lower education levels, a phenomenon explored by Ralph Richard Banks, a Stanford law professor. The cost can also be thought of as the increased risk of divorce among marriages that feature a disparity in the spouses’ educational levels.

Banks, who is black, has argued that in light of the high cost in terms of “marrying down,” highly-educated black women should consider “marrying out,” pursuing what amounts to a “substitute good”: white, Hispanic, or Asian-American men. Banks wants black women to change their preferences, and he wants the social cost associated with “marrying out” of one’s race to fall. If that happened, then young, well-educated black women’s overall demand for young, well-educated black men would shift to the left, lowering the equilibrium point in the market. Those black women who did seek to marry a black man of similar education could then pay a lower cost of “marrying down” to do so.

Banks’s argument has been controversial. Angela Stanley, for example, counters that black women are not opting out of the marriage market entirely, though they are marrying later in life. This, too, is a cost: the opportunity cost of waiting for a more appealing mate is forfeiting the social benefit of being married during those years. Then again, being single has its own appeal, and if “marrying down” is in fact risky and often unsatisfying, then the opportunity cost may actually be lower than nagging grandmothers think it is.

Marriage market for young, highly-educated African-Americans