The Second Paycheck to Keep Up with the Joneses: Relative Income Concerns and Labor Market Decisions of Married Women
AbstractThis paper provides a simple model and an empirical test of the effect of interpersonal income comparisons on labor supply. By focusing on the relative income of a full-time working man and its effect on the wife’s labor supply decision, we examine the role of relative income in labor supply decisions while avoiding the endogeneity problem that plagues the relative income–labor supply connection. The results show that the relative income of husbands plays an important role in the labor supply decisions of married women. The effects are economically meaningful and robust across various measures of relative income and reference groups.
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Eastern Economic Journal.
Volume (Year): 36 (2010)
Issue (Month): 2 (Spring)
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Other versions of this item:
- Yongjin Park, 2005. "The Second Paycheck to Keep Up With the Joneses: Relative Income Concerns and Labor Market Decisions of Married Women," UMASS Amherst Economics Working Papers 2005-10, University of Massachusetts Amherst, Department of Economics.
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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- Eduardo Pérez-Asenjo, 2011. "If happiness is relative, against whom do we compare ourselves? Implications for labour supply," Journal of Population Economics, Springer, vol. 24(4), pages 1411-1442, October.
- Oh, Seung-Yun & Park, Yongjin & Bowles, Samuel, 2012. "Veblen effects, political representation, and the reduction in working time over the 20th century," Journal of Economic Behavior & Organization, Elsevier, vol. 83(2), pages 218-242.
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