Gender Identity, Co-Working Spouses and Relative Income within Households

Bertrand, Kamenica, and Pan (2015) document that in the United States there is a discontinuity to the right of 0.5 in the distribution of households according to the female share of total earnings, which they attribute to the existence of a gender identity norm. We provide an alternative explanation for this discontinuity. Using linked employer-employee data from Finland, we show that the discontinuity emerges as a result of equalization and convergence of earnings in coworking couples, and it is associated with an increase in the relative earnings of women, rather than a decrease as predicted by the norm. (JEL D12, J12, J16, J22, J31, Z13)