The Tied-Mover Penalty and the Gender Earnings Gap

Abstract

Job changes often require workers to relocate. However, many workers are not isolated agents but live in couples who make location decisions jointly. When relocation occurs due to a job change by the "main" earner, the other partner becomes a "tied mover" who is likely to benefit less from the move; typically, the latter is the woman, and the "tied-mover penalty" then contributes to (still) persistent gender earnings and employment gaps. We quantify this tied-mover penalty using a (dynamic) event-study design that includes a synthetic comparison group to control for life-cycle confounders, leveraging panel survey data for married and cohabitating couples in Germany. We find that unlike men, tied women do not benefit from the move. For instance, men's earnings five years after the move have increased by 8%, as male working hours have increased. Part of the lack of female earnings progression in the couple is due to the presence of young children. The tied-mover penalty arises from being tied, since untied female movers show earnings gains that are similar to those of their male counterparts.