44 Pages Posted: 13 Feb 2013 Last revised: 16 Apr 2013
Date Written: February 1, 2013
We examine causes and consequences of relative income within households. We establish that gender identity – in particular, an aversion to the wife earning more than the husband – impacts marriage formation, the wife’s labor force participation, the wife’s income conditional on working, satisfaction with the marriage, divorce, and the division of home production. The distribution of the share of household income earned by the wife exhibits a sharp cliff at 0.5, which suggests that a couple is less willing to match if her income exceeds his. Within marriage markets, when a randomly chosen woman becomes more likely to earn more than a randomly chosen man, the marriage rates decline. Within couples, if the wife’s potential income (based on her demographics) is likely to exceed the husband’s, the wife is less likely to be in the labor force and earns less than her potential if she does work. Couples where the wife earns more than the husband are less satisfied with their marriage and are more likely to divorce. Finally, based on time use surveys, the gender gap in non-market work is larger if the wife earns more than the husband.
Keywords: gender roles, gender gap, marriage market
JEL Classification: D10, J12, J16
Suggested Citation: Suggested Citation
Bertrand, Marianne and Kamenica, Emir and Pan, Jessica, Gender Identity and Relative Income within Households (February 1, 2013). Chicago Booth Research Paper No. 13-08. Available at SSRN: https://ssrn.com/abstract=2216750 or http://dx.doi.org/10.2139/ssrn.2216750