To Work or Not to Work? Married Men's Earnings and the Labor Supply of Other Household Members

ABSTRACT Despite rising per capita income, improvements in female educational attainment, and declining fertility, the reported overall female employment rate in India declined from 35% in 1999 to 27% in 2012. This paper examines the association between married men's earnings and the labor supply of other household members. We find a significant negative association between men's earnings and the employment of married women, and our econometric analysis suggests that this association is robust to a range of different types of unobserved heterogeneity. There is no robust negative association between men's earnings and the employment of unmarried women, adolescents, or elderly household members. One potential explanation for these results is a negative income effect of men's earnings on the labor supply of their wives but not on the labor supply of other household members.