"Moving to Opportunity, Together" - Matthew Notowidigdo, University of Chicago Booth School of Business

Feb 19, 1:20 pm2:35 pm


Event Description

Matthew Notowidigdo studies a broad set of topics in labor economics and health economics. In labor economics, his research has focused on understanding the causes and consequences of long-term unemployment and the economic effects of unemployment insurance over the business cycle. 


Many couples face a trade-off between advancing one spouse's career or the other's. We study this trade-off by analyzing the earnings effects of relocation and the effects of a job layoff on the probability of relocating using detailed administrative data from Germany and Sweden. Using an event-study analysis of couples moving across commuting zones, we find that relocation increases men's earnings more than women's, with strikingly similar patterns in Germany and Sweden. Using a sample of mass layoff events, we find that couples in both countries are more likely to relocate in response to the man being laid off compared to the woman. We then investigate whether these gendered patterns reflect men's higher earnings or a gender norm that prioritizes men's career advancement. To do this, we develop a model of household decision-making where households place more weight on the income earned by the man compared to the woman, and we test the model using the subset of couples where the man and woman have similar potential earnings. For both countries, we show that the estimated model can accurately reproduce the reduced-form results, including those not used to estimate the model. The results point to a role for gender norms in explaining the gender gap in the returns to joint moves.