Gender Identity and Relative Income within Households*

Abstract We examine causes and consequences of relative income within households. We show that the distribution of the share of income earned by the wife exhibits a sharp drop to the right of 12 , where the wife’s income exceeds the husband’s income. We argue that this pattern is best explained by gender identity norms, which induce an aversion to a situation where the wife earns more than her husband. We present evidence that this aversion also impacts marriage formation, the wife’s labor force participation, the wife’s income conditional on working, marriage satisfaction, likelihood of divorce, and the division of home production. Within marriage markets, when a randomly chosen woman becomes more likely to…