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Differing Labor Supply: A Study on the Role of Culture

Behera, Sarthak and Sadana, Divya (2021): Differing Labor Supply: A Study on the Role of Culture.

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Abstract

In this paper, we study the role of peoples’ attitudes on their labor market behavior. Focusing within a household, we estimate how one's labor market decisions are dependent on their partner’s labor market outcomes, and how these decisions are driven by their culture component. Historically, man has been associated as the primary earner in a family. We argue that culture might play a role in determining a person’s labor market outcomes as it induces an aversion to the situation of when the wife earns more than the husband. We find that husbands increase their participation in the labor market if their wives earn more and this effect is even more prominent if they are from a country where people have the traditional view that man should be the primary bread-winner for the family. However, wives do not exhibit any such behavior. We argue that this irregularity is explained by the role that culture plays on forming labor market decisions. This result is important as it might contribute to the explanation of the slowdown in the convergence of the gender gap in the recent past.

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