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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. Apps, P.F. & Rees, R., 1993. "Labour Supply, Household Production and Intra-Family Welfare Distribution," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 405, University of Warwick, Department of Economics.
  2. Bloemen, Hans G., 2004. "An empirical model of collective household labour supply with nonparticipation," Serie Research Memoranda, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics 0002, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  3. 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.
  4. Drago, Robert & Black, David & Wooden, Mark, 2004. "Female Breadwinner Families: Their Existence, Persistence and Sources," IZA Discussion Papers 1308, Institute for the Study of Labor (IZA).
  5. 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, Elsevier, vol. 88(9-10), pages 1931-1958, August.
  6. Pencavel, John, 1998. "Assortative Mating by Schooling and the Work Behavior of Wives and Husbands," American Economic Review, American Economic Association, American Economic Association, vol. 88(2), pages 326-29, May.
  7. Patricia Apps & Ray Rees, 2005. "Gender, Time Use and Public Policy Over the Life Cycle," CEPR Discussion Papers, Centre for Economic Policy Research, Research School of Economics, Australian National University 500, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  8. Apps, Patricia F & Rees, Ray, 1997. "Collective Labor Supply and Household Production," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 105(1), pages 178-90, February.
  9. Elena Stancanelli, 2007. "Evaluating the Impact of the French tax credit on the employment rate of women," Sciences Po publications N°2007-33, Sciences Po.
  10. 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.
  11. Elena Stancanelli, 2007. "Marriage and Work: an analysis for French couples in the last decade," Documents de Travail de l'OFCE, Observatoire Francais des Conjonctures Economiques (OFCE) 2007-10, Observatoire Francais des Conjonctures Economiques (OFCE).
  12. Patricia Apps, 2006. "Family Taxation: An Unfair and Inefficient System," CEPR Discussion Papers, Centre for Economic Policy Research, Research School of Economics, Australian National University 524, Centre for Economic Policy Research, Research School of Economics, Australian National University.
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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, Springer, vol. 9(3), pages 415-428, September.
  2. 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).
  3. Pierre-Andre Chiappori & Murat Iyigun & Yoram Weiss, 2006. "Investment in Schooling and the Marriage Market," DEGIT Conference Papers, DEGIT, Dynamics, Economic Growth, and International Trade c011_034, DEGIT, Dynamics, Economic Growth, and International Trade.

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