(curious music)
This paper started among our team kind of debating how couples make decisions about when and whether to relocate to take advantage of job opportunities. I think at a very high level what we were trying to do when we started this project is distinguish between two different explanations of how couples make these decisions. Because really when they decide whether or not to move, they may also be making a decision about whose career in the household they’re gonna prioritize.
And so one explanation that I’ll kind of associate with the University of Chicago, because a lot of the theory was developed by Chicago economists like Jacob Mincer and Gary Becker, these theories emphasize the fact that households are gonna make these decisions in a way that maximizes the total income in the household. And it doesn’t matter if it’s the husband or the wife in a heterosexual couple; it’s if one of them is able to earn enough extra income to make it worth it, then we’re gonna take advantage of that opportunity.
Another set of theories are theories that have been developed mostly outside of economics, emphasizing the role of gender norms. And the theories here, I think, start from the assumption that couples for a variety of different reasons might behave in a way that prioritizes the man’s career when deciding whether or not to relocate. And they’re going to have this gender norm and stick to it, even if it means sacrificing some potential increases in household income.
What we wanted to do in this paper is just come up with new, rigorous ways of distinguishing between these two explanations, trying to assess the relative importance in explaining how couples make these decisions about whether to relocate or not. And to do this, we collected data from two different countries. We collected data from Sweden and Germany, and the data that we received allowed us to measure, for a very large number of couples, the income of the man and woman in the couple before and after they choose to relocate. And what we found in both countries is that on average, after the couple moves to a different city or a different local labor market, the man’s income goes up by much more than the woman’s after the move relative to before. So it looks as if the couples are systematically choosing to move to areas that benefit the man’s career more than the woman’s.
Now on its own that doesn’t necessarily indicate that there’s a big role for gender norms because in both countries, there’s also a big baseline gender earnings gap. Men earn more than women in both of those countries. Women are more likely to work part time. They’re more likely to take time off after the birth of children. And so it could be the case that even though these moves on average benefit the man, these are still the moves that maximize the household’s total income.
So how do we think about testing that idea against gender norms? Well, we came up with a few different ways of thinking about this. So one way we thought about it was to kind of zoom in on the set of couples where the man and the woman earned similar income initially, prior to the move and see whether within those couples, it’s still the case that the man benefits more than the woman. Alternatively, we could look at couples where the man and the woman have similar training and education. In Sweden, in our data, we can actually look at their college majors. So we can find couples where the man and the woman have similar earnings potential based on their training and college major, and look at seeing whether in those couples, it’s still the case that when they move, the man benefits more than the woman. And in fact, we find that that’s the case.
One of the other things we do is we zoom in on our data in Germany and we compare outcomes for the couples in West Germany and the couples in East Germany. And the reason we do that is there’s a lot of work in labor economics identifying differences in gender norms between those two areas. The former communist East Germany developed very egalitarian gender norms. While in West Germany, women were much more likely to take time off after the birth of a child. They were much more likely to be working part time. And they are much larger gender gaps. And so if there’s a big role for gender norms prioritizing the man’s career, you should expect to see that particularly strongly in couples from West Germany relative to couples from East Germany. And in fact, that’s what we find. When the West German couples move across cities or local labor markets, we find that the man benefits much more than the woman in terms of their change in income after the move relative to before. But in East Germany, those differences are substantially attenuated. There’s very little gender gap in terms of the change in income after the move relative to before.
Another thing we do in the paper is instead of looking at changes in income before and after a household moves, what we do in both countries is we look at instances where one member in the couple, either the husband or the wife, ends up being laid off—so they lose the job. And if they don’t find a job in their current labor market, they might decide it makes sense for them to move somewhere else to look for a job elsewhere in a different city. And what we do in this case is we compare the likelihood that the couple relocates if the husband gets laid off compared to the probability the household relocates if the wife is laid off. And what we find in both countries is that the household is much more likely to relocate if the man is laid off compared to when the woman is laid off. And we show that our model that accounts for these gender norms does a very good job reproducing this finding quantitatively.
So what I’ve described so far is a gender norm that can explain two things simultaneously, the gender gap in earnings after relocating, as well as the gender difference in the probability of moving in the first place when someone in the household gets laid off. The final thing we do in the paper is we investigate the so-called child penalty. The child penalty is a concept in labor economics that refers to the fact that after the birth of a first child in a couple, women’s income falls much more than men’s income. And that’s true in both of our countries. And so what we do at the end of the paper is try to understand whether this reflects this common gender norm that’s prioritizing the man’s career.
We set up a model where the household is behaving as if it just puts less weight on income earned by the woman compared to the man. And what we show at the end of the paper is that that way of thinking about how couples make decisions leads naturally to this so-called child penalty. Imagine after the birth of a child that someone needs to stay home and provide some childcare to the newborn baby. Well, if the woman decides to cut back, her income falls. If the man decides to cut back, his income falls. But because I behave as if I just don’t put as much weight on income earned by the woman, it makes more sense for the woman to take time off and have her income being reduced because it’s just not that costly to the household. We don’t put as much weight on those dollars compared to the dollars earned by the man.
And what we think is interesting and a bit provocative about this explanation is that the child penalty is often described in terms of differences by gender in terms of preferences for child-rearing, comparative advantage in childcare. And we show that we can reproduce the child penalty without thinking about any of those factors, but just focused on a gender norm where the household’s behaving as if it’s prioritizing the man’s career.
So we think what’s promising about our way of thinking about all of these gender gaps is the fact that they can all be explained quantitatively by a common element, which is this gender norm that’s prioritizing the man’s career.
We’ve only documented this for two countries, in Sweden and in Germany. Sweden’s thought to be a country among the high-income countries that has relatively egalitarian gender norms, whereas Germany, especially in West Germany, has more, you know, thought to have more traditional gender norms. And it’d be interesting to reproduce a lot of the results that I’ve described in a country that sits somewhere in between. That could be like the United States, Canada, Spain, Italy—countries that aren’t quite as gender egalitarian as Sweden, but not quite as gender traditional as West Germany.
