Specialization – Happily Ever After?

How does marriage contribute to the gender income gap? We answer this question by analyzing how individual income changes when individuals get married. Combining administrative and survey data, we show that there is a “marriage penalty” for women, which cannot be explained by children. This is line with spousal specialization: we show that women spend less hours on paid work in the labor market and more hours on unpaid housework after getting married. We then study mechanisms behind the “marriage penalty”. Marriage as a public policy can provide labor supply (dis-)incentives for spouses. We exploit exogenous variation in these incentives from a divorce law reform to analyze the impact of financial incentives on spousal income.