Married Women’s Work Trajectories and Income Inequality in Germany, Great Britain and the United States

Abstract

We investigate the impact of married women's breadwinner roles on income inequality in the United States, Germany and Britain. We use longitudinal data and fixed effects time series with lagged endogenous panel regression models to investigate the evolution of couples work careers and women’s earnings in the first five years following union formation. Results from these models are then used to simulate income inequality under alternative assumptions about household labor supply and welfare state support for working-age families. The results point to important ways in which cross-national differences in institutional settings structure women’s work careers: in the United States, women experience steep penalties for labor market withdrawal, especially in the early career, and substantial penalties for part-time work. In Britain, women experience similar penalties for part-time work. In Germany, women’s wages are protected by three distinctive features of the German labor market: a credential-based occupational structure, centralized wage-setting that precludes the development of sharp wage differentials for part-time work, and extensive employment protections for women who withdraw temporarily following childbirth.