The working spouse penalty/premium and married women’s labor supply
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Using data drawn from the Current Population Surveys, this paper provides a consistent explanation for why the presence of a working wife reduces the husband’s wage among managers, but increases the husband’s wage among non-managers. It is not husband’s occupation per se but rather the distribution of husbands’ wage levels that underlies the working spouse penalty or premium. Positive correlations in earnings between married couples that arise from assortative mating make the cross-wage effects of the husbands’ wages on the wives’ hours of work first positive, then negative in cross-sectional data. The phenomenon of a working spouse penalty/premium is simply the flip side of this relationship.
KeywordsWorking spouse penalty/premium Assortative mating Married women’s labor supply
JEL ClassificationsJ31 J12 J22
I wish to thank Hyunbae Chun, Hsien-Hen Lu, Daniel Hamermesh, Deborah Cobb-Clark, Christopher Surfield, Shoshana Grossbard, seminar participants at Union College, Queens College (CUNY), Colgate University, University of Tsukuba, and University at Albany (SUNY) and participants at the 2004 Annual Meetings of the Society of Labor Economists and the 2005 Annual Meetings of the Southern Economic Association for valuable comments.
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