Do Gender Roles Determine Labor Market Outcomes? Evidence from Denmark

Abstract

Using Danish administrative data, we study the impact of gender roles on gender inequality in the labor market. We make two essential findings which suggest an influence of gender roles on labor market outcomes after considering the effect of education and experience. First, more than two thirds of wives who have higher predicted earnings than their husband end up earning less than their husband. This is driven by wives underperforming their potential while husbands overperform theirs. Second, the arrival of children makes the earnings of highly educated women and men diverge sharply and persistently. Women’s earnings drop immediately and barely recover within the following ten years, while the earnings of men increase with 15 percent after ten years. Although the earnings of highly educated women drop less upon parenthood than those of poorly educated women, the long-run gender gap is close to the same for high- and low educated individuals. We find no statistically significant effect of marriage on the labor market outcomes of highly educated individuals.