The evolution of the earnings gap within couples and the role of parenthood – a life-course perspective across three German cohorts

Abstract

Objective: This article investigates for different cohorts how earnings inequalities evolve with the duration of cohabiting couples’ relationships and after childbirth. Background: Germany has undergone a paradigm shift in its family policies and so presents ideal contextual conditions to examine whether institutional change is reflected in a decrease in within-couple inequality overall and across cohorts. Method: Using a sample of 3161 couples from the Socio-Economic Panel (SOEP) from 1992 to 2023 we estimate growth curve models and fixed-effects panel regression. We differentiate three cohorts and given continued differences in gender norms analyze East and West Germany separately. Results: Our findings suggest that children substantially increase earnings inequalities within couples, and that the gap does not return to pre-birth levels over time. We also find differences across cohorts: the impact of children on the partner earnings gap has notably reduced in West Germany over time with younger cohorts experiencing lower penalties than older ones, but the earnings gap still remains substantial. In East Germany we could not find a pattern of decreasing inequality across cohorts. Conclusion: While there is some evidence that earnings inequalities between couples have reduced in our West German sample, during a time marked by paradigmatic change in German family policy, the earnings gap in couples persists and remains strongly related to the birth of children.