What an Analysis of Variation in the ‘Partner Pay-Gap' Tells Us about the Persistence of Income and Gendered Inequalities within Couples: A Comparative Analysis Using Quantile Fixed-Effects Regression.
Data and Method. Our paper looks at variation in the partner pay-gap (that is the difference between husbands’ and wives’ labour income) by quantiles and over time using six waves of the German Socio-Economic Panel (SOEP) and the United Kingdom Household Longitudinal Study (UKHLS) which spans the period 2008-2014. The datasets are regarded to be first-class, nationally representative longitudinal panel surveys (Wagner et al., 2007) and contain many cross-nationally comparable variables of interest. We examine women and men in partnerships (either married or in a cohabiting union) aged 20-59 years. We drop those with less than two years of full-information on key covariates, given our application of quantile fixed-effects models (Powell, 2014; Lamarche, 2010) which require at least two data points for correct estimations. The paper examines three different institutional and cultural contexts: The United Kingdom, Eastern and Western Germany. Our three-way comparison allows for an assessment of variance in the structuring effect of national institutions and national cultures on gendered employment strategies. Although Germany and the United Kingdom are similar in their residual institutional support for working-motherhood in terms of childcare provision, they differ markedly in parental leave policies and income support for parents with income support for parents shown to affect within-couple earnings inequalities (Dotti Sani, 2015). Moreover, the two countries have very different labour market institutions deemed relevant in shaping female labour market behaviour. The German market is typically regarded as rigid or co-ordinated whereas the UK is often classified as flexible and/or liberal (Hall and Soskice, 2001). Our ability to measure the impact of culture on gendered behaviour is further enhanced by our separate analysis of Eastern and Western Germany. Although Eastern and Western Germany share the same institutional structure, the partitioned country has been reunified since 1990, the historical legacy of state socialism in the German Democratic Republic (GDR) continues to structure cultural norms pertaining to working motherhood in a manner quite different to West-Germany (Rosenfeld et al., 2004).
Research Strategy and Preliminary Findings. We find an increasing tendency for men to out-earn their partners in each country case over-time, a finding found in earlier research using data from a different time period (Dieckhoff et al., 2015). Looking at the distribution of relative household contributions, we find a big drop-off in the proportion of couples where she out-earns her partner in each country case, a finding which replicates those of researchers using American data (Bertrand et al. 2015). Our finding of within-couple earnings inequality varies significantly by quantiles of household income. Here we find that the partner pay-gap identified at the mean is driven primarily by those in the upper quantiles. At the top of the earnings distribution we find the partner pay-gap for the highest quantile to be double that of the second highest quantile. While among the lowest earners we find a very small gender pay-gap, however this is driven by the low pay of lower skilled workers as well as lower earning men’s disproportionate exposure to unemployment. So we find gender equality for lower quantiles to be the result of disadvantageous market conditions rather than due to gender egalitarian ideals. There are also interesting differences by country case. While the UK and Western Germany are similar in the structure of the partner pay-gap by household quantiles, Eastern Germany is very different; with a comparatively smaller partner pay-gap and smaller, and in some cases declining, differences by income quintile.