Does Mobility Affect the Wage Gap?
By Melissa J. Anderson (New York City)
According to a recent Yale working paper, when married men and women relocate, men make more money, and women make less. The study is based on an analysis of population data from Denmark, and revealed that couples “chose locations with higher expected wages for the man than the woman.”
In this paper, “Geography, joint choices and the reproduction of gender inequality,” researchers Olav Sorenson, Yale University, and Michael S. Dahl, Aalborg University, set out to determine why.
“We call attention to another allocative process that contributes to the wage gap: the sorting of people to places. Workers earn more when they reside in regions with employers that value their abilities and attributes,” they write.
“In dual-earner households, however, husbands and wives often match best with employers in different regions. When couples live in places better suited for the husbands’ than the wives’ career prospects, men earn more than women.”
Studies have shown that dual-earner couples relocate less frequently than couples with one earner. Research has also shown that after dual-earner couples move, men tend to make more money, and women tend to make less.
Based on detailed calculations, Sorenson and Dahl determined that geography could account for 36 percent of the gender wage gap. “In other words, if couples split and behaved as singles (independently choosing their places of residence) one would expect the gender wage gap to narrow by roughly one-third.”
Here’s why the gap exists.
Maximizing Income
The study is based on an analysis of data on 186,919 Danish heterosexual couples in which both the male and female partner worked full time in 2004 and 2005 in blue collar or lower-level white collar jobs. This group was chosen because, for professionals with more specialized occupations, there would be less opportunity for mobility within Denmark, a small country about the size of Massachusetts, Connecticut, and Rhode Island combined.
It found that couples tend to move less often than single people, and if they do move, they tend not to move far. Finally, they found that couples are more willing to move if the man will make more money. They also found that couples are less interested in moves that would offer a higher salary to the woman, regardless of what it would mean for the man’s salary. “Danish couples therefore do not appear to weigh men’s and women’s wages equally, as the neoclassical model of family migration expects.”
What is this neoclassical model of family migration? It all comes down to a simple equation, Sorenson and Dahl explain. If the couple can net more money my moving, then they will move. “In a dual-earner household, income-maximizing couples move if G1 +G2 > 0.” Easy.
But that’s not quite what happens – it seems as though the couples in the study did not weight the male and female income inputs the same. They put “undue weight” on the male’s expected income, and this could account to up to 36 percent of the gender wage gap in Denmark, the researchers suggest.
Sorenson and Dahl performed extensive research to find out why.
Gender Discrimination?
The researchers looked into a range of potential reasons for why couples may prize male income over female income. They discovered two significant factors: a motherhood penalty and traditional gender roles.
First of all, they found that having young children had an effect on how couples considered a move. “Couples with pre-school children place significantly higher implicit weights on the man’s earnings and significantly lower ones on the women’s income.” They continue, “This effect interestingly exists despite the fact that Denmark has some of the most generous policies for providing state assistance in child care… Since our estimations excluded couples in which the mother did not maintain full-time employment, this motherhood penalty does not appear to stem from household income maximization.”
Second, they found that the male partners parents’ employment situation affected how a couple examines a move. “Couples in which the man’s parents (but not the woman’s) had greater gender inequality in terms of their relative earnings had much stronger implicit weights biased toward maximizing the man’s income. Asymmetric weighting therefore appeared primarily among couples where the man’s parents themselves had had more traditional gender roles.”
They add, “It appears that gender roles (at least in Denmark) may pass from parents to sons.”
Couples in which the man’s parents had a more traditional working arrangement (with the father as the main breadwinner and the mother making less or not working at all) tend to place more emphasis on the man’s career opportunities when considering a move.
Sorenson and Dahl write that these findings are interesting, particularly because they highlight cultural norms in egalitarian Denmark, where the wage gap is significantly lower than it is in the US. It also highlights the challenge in creating policies and programs designed to decrease the wage gap – especially when these findings seem so endogenous to couples themselves.
However, they add, “That’s not to say that public policy could not help to alleviate these disparities. But the policies to do so would need to focus either on education, which appears to move people away from traditional gender roles, or on promoting a more diverse set of employers in all regions, which decreases the likelihood that any individual has difficulty finding a well-matched employer in any particular place.”
The study shows that culture plays an important role in how people view gender and work. How those values are transmitted to both female and male children makes a big difference in the perception of equality across generational lines.
