Relative Income and Gender Norms: Evidence from Latin America

TL;DR

This study examines household income dynamics in Latin America, revealing significant discontinuities at the 50% income threshold where women earn more, with implications for gender norms and labor supply.

Contribution

It provides the first large-scale evidence of income distribution discontinuities within households across multiple Latin American countries, highlighting gender norm shifts.

Findings

Discontinuities are up to five times larger than in high-income countries.

Women primary earners work more in non-market labor, but the gap narrows.

Patterns are consistent across countries, subgroups, and even same-sex couples.

Abstract

Using data from over 500,000 dual-earner households in Mexico, we provide evidence of discontinuities in the distribution of relative income within households in Latin America. Similar to high-income countries, we observe a sharp drop at the 50% threshold, where the wife earns more than the husband, but the discontinuity is up to five times larger and has increased over time. These patterns are robust to excluding equal earners, self-employed individuals, or couples in the same occupation/industry. Discontinuities persist across subgroups, including couples with or without children, married or unmarried partners, and those with older wives or female household heads. We also find comparable discontinuities in Brazil and Panama, as well as among some same-sex couples. Moreover, women who are primary earners continue to supply more non-market labor than their male partners, although the gap is narrower than in households where the woman is the secondary earner.