Do Couples Take Financially Rational Decisions When They Become Parents? No, But They Believe They Do

Abstract

When new parents divide paid and unpaid work, they may not benefit financially from their decisions. New mothers are more likely than new fathers to reduce paid working hours, even if they contribute as much or more to family income. To determine why they make economically inefficient decisions when they divide their labor, this study traces new parents’ financial decision-making. The study is based on 133 in-depth interviews with 54 parents (27 couples) residing in French-speaking Switzerland. Parents were interviewed once before and once or twice during the first 2 years after the birth of their first child. The study focuses on two financial decisions parents must make: about division of working hours and type of childcare. Parents did not calculate the real costs of their labor division; gender norms shaped their cost estimates. They underestimated costs consistent with norms that defined mothers as caregivers and fathers as providers and overestimated costs when fathers acted as caregivers and mothers acted as providers. Even when parents voiced opposition to gender norms, they rationalized gendered labor division as economically efficient and their decisions conformed to those norms. Because real costs of labor division deviated from estimated costs, researchers who conduct studies on parents’ financial decisions should account for that discrepancy.