Why do people live in cities? According to Pieter Gautier, Professor at the VU University Amsterdam, cities play an important role as ‘marriage markets’. The idea is simple. Cities are dense areas where singles can meet more potential partners than in rural areas -the search market is more efficient. To enjoy those benefits, they are willing to pay a premium in terms of higher housing prices. Once married, the benefits from meeting more potential partners vanish and married couples move out of the city.
Gautier’s research indicates that finding a partner plays a more important role in moving to the city than finding a job. If the proximity to jobs would be the key factor so called Power Couples would stay in the city. But they move to the country much more often than Power Singles.
We find that the fraction of individuals living in one of the 5 largest cities in Denmark at age 18 is 22%, at the date of marriage this fraction has increased to 36% and after 5 years of continued marriage it bounces back to 23%
Attractive singles, defined by education, income, father’s education and father’s income, benefit most from a dense marriage market and are therefore more likely to move to the city. Unattractive people have less to gain and stay at the countryside…
In order to address life-cycle motives –the idea that young people like the dynamics of cities where elderly appreciate the calm of ‘nature’- they considered individuals who are divorced. If their location choice was based on life-cycle considerations we expected them to stay in the country. But we give evidence that divorcees tend to move back to the city.