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Working With Spouses Helps Women Earn More – But Not More Than Their Partners

A new study from Aalto University School of Business suggests there are ways in which husbands are, indirectly, supporting their wives in securing a higher wage – as long as that higher wage doesn’t exceed their own...
A new study suggests there are ways in which husbands are, indirectly, supporting their wives in securing a higher wage – as long as that higher wage doesn’t exceed their own…
  • Working women in Finland typically earn around 42 percent of the family income
  • Couples with the largest difference in salary are most likely to separate
  • Self-employed couples may facilitate greater equality of earnings to reduce income tax

When working to climb the career ladder, for women, it can still be very much a man’s world as it seems that, unlike their husbands, women must also consider wha the impact of a better job and greater pay might have on the stability of their home lives. According to the World Values Survey, 36 percent of people in the US and 39 percent of the EU’s population agree that “if a woman earns more money than her husband, it’s almost certain to cause problems”.

While such results certainly give the impression that men aren’t overly keen on the idea of women becoming financially superior to them, and the ever-present gender wage gap does little to sway such perceptions, a separate study, conducted by faculty at the Aalto University School of Business provides some hope. It suggests there are ways in which husbands are, indirectly, supporting their wives in securing a higher wage – as long as that higher wage doesn’t exceed what they themselves earn.

According to Dr. Natalia Zinovyeva, a visiting professor at the Finland-based school, when women work in the same environment as their spouses; whether they are self-employed co-workers or both employed by the same company, the partnership results in their earnings improving.

Working in collaboration with Dr. Maryna Tverdostup, an economist at the Vienna Institute for International Economic Studies, Dr. Zinovyeva examined linked employer-employee data, which contained registry information on the entire Finnish population from 1988 until 2014, to see if women out-earning their male partners caused significant tensions, either when couples began cohabiting or around the time of their separation.

From this exploration they discovered that the fraction of couples in their data increased as women earn more relative to their husbands or boyfriends, up until the point where they brought home just below half of their household’s income. However, when that wage exceeded the halfway mark, the fraction plummeted sharply.

In essence, the researchers say, this means the most common living situation for cohabiting or married partners in Finland is one where the woman typically wins about 42 percent of the bread.

According to Dr. Zinovyeva, previous research into why this is the case has frequently pointed to gender norms as the prime suspect. The World Values Survey from 1995-1998 shows that 33.9 percent of Finns believed a woman should seek to earn less than her husband to avoid family problems. “Although women in Finland have achieved a relatively high degree of equality in many dimensions, survey information suggests that the gender norm regarding relative earnings in households is as relevant here as in the United States,” she says.

However, the researchers’ latest findings add a sprinkle of nuance to the discussion. Dr Zinovyeva says they found no significant discontinuity when comparing a couple’s relative incomes at the beginning of cohabitation nor at the point of a breakup.

But let’s slam on the breaks for a second. What is a “discontinuity”, and what does it have to do with women’s earnings?

A discontinuity is any point at which a continuous set of data is broken, most often shown on a graph. Imagine you are riding a train. Each station the train stops at is a data point; the train track itself is a line that threads between the points showing a prevailing trend. We have a continuous set of data.

Now imagine that you blink. A fraction of a second passes, but in that time the train leaps forward twenty miles, missing a bunch of stations. In our analogy, this means you’ve jumped over several data points and the continuous line was broken. This demonstrates a significant event – a discontinuity.

In the case of Dr. Zinovyeva’s research, the discontinuity is the sheer drop in the fraction of couples at the point where women earn 50 percent of the household income. From this, the researchers conclude that a woman’s salary rising above her male spouse’s poses a notable issue because of the steepness and immediacy of the fall in the fraction of couples where this is the case. However, remember that the researchers found no evidence of this cliff edge when it comes to couples starting to cohabit or choosing to separate.

Dr. Zinovyeva and her colleague describe the relationship between a couple’s relative incomes and the likelihood of separation as a “U-shape”. This means that the greater the disparity between their earnings, the more likely it is that someone’s getting served divorce papers. And it doesn’t matter who’s earning more – the man or the woman. Couples whose wages are closer to parity with one another tend to be stabler.

So are gender norms to blame? Do Finnish men have a problem with female breadwinners?

Further considerations arise from another of the researchers’ discoveries… When couples become self-employed they tend to equalise their incomes, no matter who was earning the higher amount previously. Dr. Zinovyeva suggests this is because it is more advantageous for self-employed couples to find greater parity as this may help to reduce income tax payments, facilitate accounting, or avoid unnecessary family negotiations over wages.

The researchers found that this compression towards equal earnings is true of couples that work for the same company as well. As women usually earn the lower salary to begin with, this means, for them, an increase in their pay, possibly due to improved negotiation of their wages, says Dr. Zinovyeva.

“This does not imply that gender norms do not play a role in marriage and in women’s labour supply decisions. It is possible that the norm gradually gains importance with the increase in the relative earnings of women,” she adds.

While women should be more than capable of fighting their own battles when it comes to wage negotiation, allyship and the eradication of gender-based stereotypes in the workplace can still be found to be lacking. Therefore additional support to level the playing field, in any form, should always be welcomed.

Surprising as it may be for many, it seems that on the road to gender equality women have found a staunch ally not in their male colleagues and companions, but instead in income tax! We clearly still have a very long way to go…

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