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Marriage and misallocation: evidence from 70 years of US history

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  • Lee, Jay Euijung

Abstract

The traditional expectation that married women should be homemakers restricts them from pursuing their comparative advantage in the labor market. I quantify the aggregate economic consequences of these marriage-specific gender norms, accounting for selection into marriage and labor force participation. In 1940, married women faced a "norms wedge" equivalent to a 44% tax on market wages compared to similar single women, which fell to 14% by 2010. Had these norms persisted at 1940 levels, market output today would be 8.7% lower and combined market and home output 5.3% lower. Amplification effects through endogenous human capital investment and marriage decisions, which reshape the productivity distribution of both women and men, are critical to generating these large results.

Suggested Citation

  • Lee, Jay Euijung, 2025. "Marriage and misallocation: evidence from 70 years of US history," LSE Research Online Documents on Economics 141546, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:141546
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    File URL: https://researchonline.lse.ac.uk/id/eprint/141546/
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    JEL classification:

    • N0 - Economic History - - General
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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