Moving to Opportunity, Together

Seema Jayachandran, Lea Nassal, Matthew Notowidigdo, Marie Paul and Heather Sarsons
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Lea Nassal: University of Duisburg-Essen
Heather Sarsons: University of British Columbia and NBER

Working Papers from Princeton University, Department of Economics, Center for Economic Policy Studies.

Abstract: Many couples face a trade-off between advancing one spouse’s career or the other's. We study this trade-off by analyzing the earnings effects of relocation and the effects of a job layoff on the likelihood of relocating using detailed administrative data from Germany and Sweden. Using an event-study analysis of couples moving across commuting zones, we find that relocation increases men’s earnings more than women’s, with strikingly similar patterns in Germany and Sweden. Using a sample of mass layoff events, we find that couples in both countries are more likely to relocate in response to the man being laid off compared to the woman. We then investigate whether these gendered patterns reflect men’s higher earnings or a gender norm that prioritizes men’s career advancement. To do this, we develop a model of household decision-making in which households place more weight on the income earned by the man compared to the woman, and we test the model using the subset of couples where the man and woman have similar potential earnings. For both countries, we show that the estimated model can accurately reproduce the reduced-form results, including those not used to estimate the model. The results point to a role for gender norms in explaining the gender gap in the returns to joint moves.

Keywords: Germany; Sweden; Labor migration; tied movers; gender gap in earnings (search for similar items in EconPapers)
JEL-codes: J16 J61 R23 (search for similar items in EconPapers)
Date: 2024-02
New Economics Papers: this item is included in nep-mig and nep-ure
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Working Paper: Moving to Opportunity, Together (2024)
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