Why are married men working so much? Relative wages, labor supply and the decline of marriage

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Description/Abstract

Are macro-economists mistaken in ignoring bargaining between spouses? The stationarity, since the mid 1970s, of married-menís average weekly hours of paid labor suggests that the inclusion of bargaining between spouses is essential for understanding the labor supply trends of married women. This paper develops and calibrates to US time-use survey data a simple macro-style model of marital bargaining, where the allocations depend on equilibrium marriage and divorce rates. The results suggest that bargaining reduces by roughly 50% the e§ect of the closing of the gender gap in wages on the labor supply of married women. Even with respect to average paid labor of married couples, the prediction error from ignoring bargaining would be on the order of 5 hours per week. The model without bargaining also exaggerates the impact on the decline of marriage resulting from the declining price of home equipment, from tax reform and from the closing of the gender gap