Economic Incentives, Childcare and Gender Identity Norms

Abstract

This paper investigates the role of gender identity norms in shaping men's and women's time allocation, based on observed behavior following a change in the market penalty for adopting prescriptive norms. To perform this test, we study the reallocation of childcare across parents, following changes in their relative take-home pay. Exploiting variation from Swedish tax reforms, we estimate the elasticity of substitution in parental childcare for natives and immigrants from a variety of countries, characterized by varying gender norms. We find that couples originating from countries with relatively conservative norms are more likely to reallocate childcare across spouses following a reduction in the husband's tax rate, and less likely to reallocate childcare following a reduction in the wife's tax rate, thereby reinforcing a traditional allocation of childcare across parents.

JEL Classification: D13, H24, J22