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Modelling the employment and wage outcomes of spouses: Is she outearning him?

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  • Hans G. BLOEMEN and Elena G. F. STANCANELLI

    (Free University Amsterdam, Department of Economics, De Boelelaan 1105, 1081 HV Amsterdam, The Netherlands, Tinbergen Institute, IZA, and Netspar. Université de Cergy Pontoise, CNRS, THEMA, F-95000, Cergy Pontoise, France)

Abstract

This paper is focused on couple households where the wife is the main earner. The economic literature on this subject is particularly scant. According to our estimates, the wife was the main earner in one of every six couple households in France in 2002, including wife-sole-earner households. The proportion of wives outearning their husbands was 18% for dual-earners. About 24% of American women in dual-earner households earned more than their husband in 2004. Using a model of household labour supply behaviour, we show that households where the wife is the main earner may come about either because the husband has a weaker preference for work than his wife, due possibly to her high wage, or because he is hit by adverse circumstances, such as, for example, a decline in the demand for men with his particular qualifications. Positive assortative mating may also come into play. Our empirical model specifies spouse labour-market participation equations within each household, endogenizing wages and allowing for random effects and correlations in spouses’ unobservables. We conclude that the determinants of wife-sole-earner households are quite distinct from those for dual-earner households where she outearns him. The probability of observing the first seems to be more related to labour market difficulties of the husband, while the latter is not. Dual-earners where she outearns him are more likely to be found among higher educated couples, and especially, among couple where the wife’s education level is high.

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Bibliographic Info

Paper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2008-36.

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Date of creation: 2008
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Handle: RePEc:ema:worpap:2008-36

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Keywords: Marriage; work behaviour; household economics.;

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References

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  1. Elena Stancanelli, 2007. "Evaluating the impact of the French tax credit on the employment rate of women," Documents de Travail de l'OFCE 2007-33, Observatoire Francais des Conjonctures Economiques (OFCE).
  2. HansG. Bloemen, 2010. "An Empirical Model of Collective Household Labour Supply with Non-Participation," Economic Journal, Royal Economic Society, vol. 120(543), pages 183-214, 03.
  3. Apps, P.F. & Rees, R., 1996. "Collective Labor Supply and Household Production," Papers 301, Australian National University - Department of Economics.
  4. Elena Stancanelli, 2007. "Marriage and Work: an analysis for French couples in the last decade," Documents de Travail de l'OFCE 2007-10, Observatoire Francais des Conjonctures Economiques (OFCE).
  5. Robert Drago & David Black & Mark Wooden, 2004. "Female Breadwinner Families: Their Existence, Persistence and Sources," Melbourne Institute Working Paper Series wp2004n19, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  6. Eissa, Nada & Hoynes, Hilary Williamson, 2004. "Taxes and the labor market participation of married couples: the earned income tax credit," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1931-1958, August.
  7. Apps, Patricia & Rees, Ray, 2005. "Gender, Time Use and Public Policy over the Life Cycle," IZA Discussion Papers 1855, Institute for the Study of Labor (IZA).
  8. François Bourguignon & Thierry Magnac, 1990. "Labor Supply and Taxation in France," Journal of Human Resources, University of Wisconsin Press, vol. 25(3), pages 358-389.
  9. Apps, P.F. & Rees, R., 1993. "Labor Supply, Household Production and Intra-Family Welfare Distribution," Papers 248, Australian National University - Department of Economics.
  10. Arthur van Soest, 1995. "Structural Models of Family Labor Supply: A Discrete Choice Approach," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 63-88.
  11. Patricia Apps, 2006. "Family Taxation: An Unfair and Inefficient System," CEPR Discussion Papers 524, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  12. Pencavel, John, 1998. "Assortative Mating by Schooling and the Work Behavior of Wives and Husbands," American Economic Review, American Economic Association, vol. 88(2), pages 326-29, May.
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Cited by:
  1. Zeenat Soobedar, 2011. "A semiparametric analysis of the rising breadwinner role of women in the UK," Review of Economics of the Household, Springer, vol. 9(3), pages 415-428, September.
  2. Pierre-Andre Chiappori & Murat Iyigun & Yoram Weiss, 2006. "Investment in Schooling and the Marriage Market," DEGIT Conference Papers c011_034, DEGIT, Dynamics, Economic Growth, and International Trade.
  3. Mansour, Hani & McKinnish, Terra, 2012. "Who Marries Differently-Aged Spouses? Earnings, Ability and Appearance," IZA Discussion Papers 6678, Institute for the Study of Labor (IZA).

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