Relative Income and Gender Norms: Evidence from Latin America

Using data from over 500,000 dual-earner households in Mexico, we provide evidence of discontinuities in the distribution of relative income within households in Latin America. Similar to the situation in high-income countries, we observe a sharp drop at the 50% threshold, i.e., where the wife earns more than the husband, but the discontinuity is up to five times larger and has increased over time. These patterns are robust to the exclusion of equal earners, self-employed individuals, and couples in the same occupation/industry. Discontinuities persist across subgroups, including couples with or without children, those with married or unmarried partners, and those with older wives or female household heads. We also find comparable discontinuities in Brazil and Panama, as well as among some same-sex couples. Moreover, women who are primary earners continue to supply more nonmarket labor than do their male partners, although the gap is narrower than in households where the woman is the secondary earner.