Tuesday, September 25 at 12:00 in the Cassel Room (A700).

Sarah Rosenberg, Université Libre de Bruxelles / ENTER.

"The Breadwinner Norm Revisited: The Effect of Relative Wage on the Labor Supply of Married Women".

Abstract

For the vast majority of opposite-sex couples, husbands are the primary breadwinner. In many cases, this feature holds even when the wife has a higher wage. I document a stylized fact that contributes to this phenomenon: the average working hours of wives increase until the intra-household wages are equal, and decline as the relative wage of the wife increases further. I explore whether this decline in hours owes to causal responses to increases in the intra-household relative wage or to other factors such as selection patterns into marriage. To estimate the causal effect of the relative wage, I use the Bartik method to exploit geographical variation in wages across couples. My results suggest that the causal response to the relative wage is in fact positive even when the wife’s wage is higher. In turn, this suggests that factors such as selection into marriage may indeed be important in explaining the kink in the hours-relative wage relationship.