The Economic Costs of Men's Long Work Hours for Women: Evidence on the Gender Wage Earnings Gap from Australia and Germany

Women's earnings inequality persists, despite policy efforts to reduce discrimination and gender bias. Gender gaps in earnings, however, are a function of hours worked as well as wage rates, and reflect gendered short and long work hour patterns. Within households, how partners exchange time is a crucial driver of hours worked yet this is rarely incorporated into analysis of gender earning gaps. Using a two-stage instrumental variable Oaxaca-Blinder decomposition we model earnings gaps as a function of own and partner hours on and off the job. This enables us to estimate what the gender gap in hours and earnings would look like without a gendered time ‘subsidy’ or ‘borrowing’ in the home. We studied dual-earner households in two countries, Australia and Germany, finding a weekly earnings gap of AUD$536 and €400. This was accompanied by a weekly work hour gap of 12 h in Australia and 13 in Germany. When we accounted for the influence of partner’s hours (paid or unpaid), work hour gaps reduce to 5.1 h in Australian households (58% reduction), and to 6.9 h in German (47% reduction). In effect, women would work 3 to 4 h more each week, and men’s long hours would reduce, narrowing the gender earnings gaps by 43% in Australia and 25% in Germany, if time ‘subsidies’ in the home were eliminated. Our analysis reveals the economic cost to women long work hour cultures impose.