Gender identity and relative income within household: Evidence from China

Abstract: How does women's obedience to traditional gender roles affect their labour outcomes? To investigate on this question, we employ discontinuity tests and fixed effect regressions with time lag to measure how married women in China diminish their labour outcomes so as to maintain the bread-winning status of their husbands. In the first half of this research, our discontinuity test exhibits a missing mass of married women who just out-earn their husbands, which is interpreted as an evidence showing that these females diminish their earnings under the influence of gender norms. In the second half, we use fixed effect regressions with time lag to assess the change of a female's future labour outcomes if she currently earns more than her husband. Our results suggest that women's future labour participation decisions (whether they still join the workforce) are unaffected, but their yearly incomes and weekly working hours will be reduced in the future. Lastly, heterogeneous studies are conducted, showing that low-income and less educated married women are more susceptible to the influence of gender norms.