Education, Employment, and Gender Inequality amongst Couples: A Comparative Analysis of Britain and Germany

Abstract

It is well understood that children benefit educationally the greater the education of their parents. However, transfers of the benefits of human capital within the home occur between partners too. The more educated an individual the more able he or she is to provide a partner with effective career support. Individuals will on average earn more the higher the education of their partner. This reciprocal support need not, though, be equal. Various factors may intervene to make the transfer asymmetrical, thus creating implicit gender inequalities. While women have broadly the same educational background as men, they work less and on average get paid less. This suggests some "under-used" human capital. Although if she works she benefits from his education, their differing work and domestic roles mean that he is likely to benefit more. This argument re-invokes the "domestic labour debate" in which it was argued, and contested, that female domestic labour is a subsidy either to the employer or to the woman's working husband. Here it is argued that female human capital can be thought of as a source of subsidy to her partner's wage. It also re-invokes an earlier debate in economics explicitly concerned with transfers of social capital between spouses: should wage models include a term for partners' education? Here, in a comparison of men and women in two countries - Great Britain and (West) Germany - we do include such a term, but, using household data, produce models of both male and female wages. The results show that apparent transfers do occur, that broadly though not universally they are more in favour of the male, and that these effects vary by the degree of educational homogamy in the two countries.