Explaining the Gender Division of Labour:The Role of the Gender Wage Gap

This paper draws on the economics literature on market labour supply and the sociology literature on domestic labour supply. Each literature has explored the factors underlying male specialisation in market work and female specialisation in domestic work, but has tended to focus on labour supply to one sector (market or domestic) in isolation from supply to the other. This paper uses data from the UK Time Use Survey 2000 on a matched sample of spouses to estimate household labour supplies to both sectors as a function of the spouses’ earnings capacities. The estimation procedure is a simulated maximum likelihood technique that allows for unobserved household-level random effects. In order to allow for non-participation, we estimate an available market wage for both the employed and non-employed individuals in the sample by combining the time use data with wage data from the Labour Force Survey. We use the estimated parameters from the labour supply equations to conduct a decomposition of two measures of the degree of gender specialisation within the household – the average gender gaps in weekly hours of market and domestic work. Our method allows us to decompose these gaps into a component that can be explained by spousal differences in earnings capacity and a residual gender effect. Our results suggest that the roles played by spouses within the household are responsive to economic incentives, but that the way in which men and women respond to those incentives is highly asymmetric. We conclude that a gender-neutral model of family decision-making cannot capture important features of the processes by which family members allocate time to different uses.