Educational Homogamy and Inter-Couple Income Inequality: Linking Demographic and Socio-Economic Consequences of Educational Expansion in Germany and Switzerland

Abstract

How is educational expansion associated with increased educational homogamy and income inequality? Using SOEP and SHP panel data, we randomly match couples and compare the resulting income distribution to the observed one. Educational homogamy thereby has had only a marginal impact on earnings-based income inequality between couples, which is largely due to the endogenous decision-making of couples concerning working time.Keywords: educational homogamy, educational expansion, income inequality, labor supply Bildungshomogamie und Einkommensungleichheit zwischen Paarhaushalten: Demographische und sozioökonomische Konsequenzen der Bildungsexpansion in Deutschland und der SchweizZusammenfassung: Inwiefern geht die Bildungsexpansion mit erhöhter Bildungshomogamie und Einkommensungleichheit einher? Mittels Paneldaten des SOEP und des SHP vergleichen wir die Einkommensungleichheit zufällig erstellter Paarhaushalte mit der beobachteten Verteilung. Die Bildungshomogamie hatte dabei jedoch nur einen marginalen Einfluss auf die Einkommensungleichheit zwischen Paarhaushalten und ist weitgehend auf deren endogene Erwerbsentscheidungen zurückführbar.

Work, childcare, or both? Experimental evidence on the efficacy of childcare subsidies in raising parental labor supply

“…We also hypothesized that lower status parents would respond more strongly to subsidies, since the costs of childcare have a greater impact on their household budgets. Furthermore, we anticipated that due to the fact that a majority of fathers hold full-time jobs, the subsidies would primarily affect mothers because they predominantly work part-time (Kalleberg 2000;Wise and Zangger 2017). Finally, while previous research yields ambiguous results on the effects of ethnicity / migration background on various labor market outcomes, following our theoretical model, we had no reason to suspect differences in the responsiveness to childcare policies other than those induced by social status and monetary resources.…”

“…They would thus want to either continue pursuing their careers-which usually involves working on more than 2 days-or commit to being a stayat-home-mum. Since marriages and partnerships in general are still rather homogenous in terms of education and status (e.g., Kalmijn 1998;Wise and Zangger 2017), their spouses and partners would typically bring in enough money to make working solely for the sake of money unnecessary. For lower status mothers on the other hand, even working only up to 2 days a week might still significantly boost their household income, with or without the additional benefits of "having a career".…”

“…Switzerland as a male-breadwinner country (Kalleberg 2000;Wise and Zangger 2017). Comparing the distribution of respondents' labor supply in the factorial survey, however, we see that especially men working full-time in real-life opt for a reduced labor supply in the hypothetical situation.…”

“…Based on our theoretical model and the extent to which people differ in their assessment of the value of non-parental childcare and their levels of consumption, we also expect that parents differ in their response to childcare subsidies. Because men still have a higher employment rate than women in Switzerland and men still mainly work full-time (e.g., Wise and Zangger 2017), there is a difference in the potential that policies can be expected to unleash. While men hardly have leeway to work more hours, women have more room to react.…”

“…However, the simulations based on the estimated utility function show that our results are driven by women. Men do not seem to respond to subsidies at alla result that might be explained by the fact that Switzerland can still be characterized as a male-breadwinner country (Wise and Zangger 2017) and that especially high-status men are not really open to the idea of working (much) less than full time, even in a hypothetical setting. In addition, the mean increase in labor supply is generally small, with the biggest difference between the case in which subsidies cover 25% of childcare costs compared to no subsidies.…”