Work life balance: Gender norms and the Swedish labour market

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Gender identity norms are possible drivers of persistent gender inequalities in the labour market. But the extent to which such norms restrict the behaviour of couples is debated. This column examines how Swedish households changed their professional and housework balance in response to the introduction of a tax credit that altered the relative take-home pay in different ways for spouses within couples. The research shows that immigrant couples, who tend to come from countries with more traditional gender norms than Sweden, responded more strongly to a reduction in the husband’s tax rate than the wife’s. By not responding to women’s tax cuts, these couples may forgo as much as £2,000 per year in household disposable income.


Rigid identity norms about the roles of men and women are a possible driver of gender inequality. For example, ideas like ‘the male-bread-winner’ model for households are possible causes of persistent gender inequalities in the labour market (Akerlof and Kranton, 2000; Bertrand, 2010). Conservative views about men’s and women’s professional lives can hamper gender equality, and curb people’s potential.

But the extent to which such ideas restrict the behaviour of couples is debated (e.g., Fernandez et al., 2004; Fortin, 2005; Bertrand et al., 2015; Bursztyn et al., 2017, 2018, Folke and Rickne, 2019). While the simple observation of men’s and women’s specialisation in market and domestic work may be highly suggestive of gender identity norms, the observed time allocation of spouses may also be a consequence of gender-wage gaps in the labour market. In either case, there are forces that play which mean that men and women often experience different career trajectories, as well as different experiences of family life. True equality remains elusive.

Suppose, for example, there is a couple in which the wife mostly works at home and the husband mainly works in the market (i.e., has a paid job). Even if the couple had a preference for equal gender roles, they would appear as a traditional couple because, in the presence of wage gaps, household resources are maximised when the wife stays at home. An unfair society will continue to create unfair lifestyles, creating a negative cycle.

 

Data from Sweden

In our recent research paper, we argue that a more informative test of the role of binding gender norms requires measuring whether – and how – the allocation of home production between spouses changes after a change in the financial cost of adopting gendered norms. This happens when spouses’ relative wages change for a reason outside a couple’s control. The idea here is to assess whether it is the wage level or the couple’s

underlying beliefs about gender roles that is driving the work-home balance of the two people.

Ideally, one would like to run an experiment in which, for example, female wages increase in a randomly selected group of couples, compared with an otherwise similar group in which male wages increase instead. Suppose that in the first group, the allocation of home production stays unchanged, while in the second, more home production is loaded on the wives. Such a finding would indicate that couples in this population are willing to ‘leave money on the table’ in order not to load husbands with more home production, even when it would be financially convenient for the household, but that they are ready to load more home production on wives when this becomes financially convenient. This would be evidence of a binding traditional identity norm.

In contrast, if the first group reacts and the second one does not, this would be evidence of a binding untraditional norm, prescribing that more home production can be loaded on husbands, but not on wives. So, how couple behave in the face of changing wage offers in terms of domestic (unpaid) work allocation offers useful lessons on underlying beliefs.

While we cannot run this experiment, we can exploit (as a quasi-experiment) the introduction in 2007 of an earned income tax credit in Sweden. This policy altered in different ways the marginal tax rates (and the relative take-home pay) of spouses in couples that were arguably similar prior to the implementation of the reform. This Swedish case study offers a setting to examine the possible interactions between changing wage conditions and gender norms.

In our paper, we combine variation in tax cuts driven by the reform with information on how spouses adjusted their home-production time as a reaction to the reform. We use a proxy of home-production time available in Swedish administrative data sources, given by the take-up of temporary parental leave to care for a sick child during regular working hours. We show that fathers’ share of temporary parental leave is positively and significantly correlated to their share of overall home production in a subset of couples in which we have information on both indicators. In the study, we explore variation in behaviour across the group of Swedish resident couples, who may abide by different (and differently binding) gender norms. We detect evidence of both traditional and untraditional norms in different subgroups of the population.

 

Lessons from our study

The results are striking. We find that the allocation of home production among immigrant couples responds more strongly to a reduction in the husband’s than the wife’s tax rate, while the respective allocation among native couples responds symmetrically to either wives’ or husbands’ tax cuts. Native couples are equally likely to have husbands or wives spend longer hours in the home when economic incentives push in the corresponding direction, but immigrant couples hardly respond to incentives for wives to work more in

the market and husbands to work more in the home. Taking a step back, what this shows is that gender norms differ, and that this passes through to differing behavioural responses to changes in wage prospects for men and women in Sweden.

We interpret this as evidence that immigrant couples in Sweden – on average originating from countries with more conservative gender norms than Sweden – behave more traditionally in their time allocation decisions than native couples. By not responding to wives’ tax cuts, simple calculations based on their opportunity cost of home production show that traditional couples may forgo as much as £2,000 per year in household disposable income. However, we also find that the differences between immigrants and native couples tend to wane with the length of exposure of immigrants couples to host-country norms.

 

What next?

There is evidence of a feedback loop here. Couples who behave more traditionally are more likely to exacerbate gender disparities in childcare time when incentives push in that direction, while they are not as responsive to incentives that would induce a more equal gender division of labour. Untraditional couples are instead more willing to respond to economic incentives whenever they lead to a more equal gender division of labour.

These findings should inform the design of policies aimed at incentivising female participation in the labour market, as the labour supply impact of tax incentives would vary with the type and strength of gender norms in the affected population. There are forces beyond economic incentives at play, and policymakers should be alert to this reality.

 

Authors: Peter Skogman Thoursie, Martina Olsson, Barbara Petrongolo, Andrea Ichino

Authors’ note: A previous version of this article appeared as a column on VoxEU, published on 11 September 2019.