Influence of a Wife's Working Status on Her Husband's Accumulation of Human Capital

• Author: Yukichi Mano,Eiji Yamamura
• Date: 01 December 2013
• Published date: 01 December 2013
• DOI: http://doi.org/10.1111/asej.12017

Influence of a Wife’s Working Status on Her

Husband’s Accumulation of Human Capital*

Yukichi Mano and Eiji Yamamura

Received 9 November 2011; accepted 5 March 2013

Japanese household-level data consisting of husband’s earnings, wife’s working

status and their schooling levels are used to test three hypotheses, with particular

consideration given to the time-consuming process of human capital accumulation

within marriages. The empirical results supports the following hypotheses: (i) a

non-working wife’s schooling has a greater positive effect on her husband’s earn-

ings than a working wife’s schooling; and (ii) the effect of a non-working wife’s

schooling increases with the length of marriage, whereas the effect of a working

wife’s schooling does not change over the course of marriage.

Keywords: human capital, schooling, health, working status, cross-productivity

effect, assortative mating effect.

JEL classification codes: I12, I21, J12, J22, J24.

doi: 10.1111/asej.12017

I. Introduction

Although human capital accumulation often requires costly investment in formal

education and working experience (e.g. Becker, 1964; Heckman and Polachek,

1974; Mincer, 1974; Ashenfelter and Krueger, 1994; Behrman et al., 1994; Card,

1999), it also results from interaction with one’s environment. In fact, economic

outcomes, such as an individual’s earnings, are often associated with family

and community backgrounds (e.g. Behrman and Wolfe, 1984; Boulier and

Rosenzweig, 1984; Hauser and Sewell, 1986; Corcoran, 1992). For example, a

person’s earnings are positively associated with their parents’ schooling (e.g.

Heckman and Hotz 1986; Lam and Shoeni, 1993, 1994; Behrman et al. 1999),

and learning from neighbors can help a person increase both productivity and

income (Foster and Rosenzweig 1995; Conley and Udry, 2010).

It is thus natural to expect that such human capital accumulation through social

interaction also occurs between a husband and wife. Benham (1974) was the first

to argue that an educated wife improves her husband’s productivity and, there-

fore, increases his earnings. This is the so called cross-productivity effect within

marriage (see also Scully, 1979; Kenny, 1983; Wong, 1986; Lam and Shoeni,

1993; Jepsen, 2005; Lefgren and McIntyre, 2006; Mano and Yamamura, 2011;

*Mano (correspondence author): Hitotsubashi University, 2-1 Naka, Kunitachi-shi, Tokyo 186-

8601, Japan. Email: yukichi.mano@gmail.com. Yamamura: Department of Economics, Seinan

Gakuin University, 6-2-92 Nishijin, Sawara-ku, Fukuoka 815-0075, Japan.

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Asian Economic Journal 2013, Vol. 27 No. 4, 323–339 323

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Asian Economic Journal © 2013 East Asian Economic Association and Wiley Publishing Asia Pty Ltd

Yamamura and Mano, 2012). This effect is distinct from the assortative-mating

effect; that is, educated women tend to be matched in marriage with high-ability

men who have high earnings (Welch, 1974; Liu and Zhang, 1999).1As is evident

from the literature, disentangling the cross-productivity effect from the

assortative-mating effect has been a major challenge. Using data for twins to

control for the unobserved mating effect, Huang et al. (2009) find that cross-

productivity is significant in explaining the patterns of earnings among Chinese

households. It is not clear whether the finding of Huang et al. is readily general-

izable beyond the Chinese context. More importantly, the mechanism of the

cross-productivity effect has yet to be clarified. The present paper attempts to

identify more clearly the mechanism underlying the cross-productivity effects by

investigating recent Japanese household data relating to the earnings, human

capital characteristics and working status of husbands and wives.

It is well established that both the quantity and the quality of education

improve a person’s productivity and earnings (Welch, 1966; Johnson and

Stafford, 1973; Behrman and Birdsall, 1983; Card and Krueger, 1992). Quantity

of education is often measured by the number of years of schooling. Quality of

schooling could be measured according to the educational level of teachers.

Therefore, it should be possible to use an analogous framework to analyze the

cross-productivity effect where a wife improves her husband’s productivity and

earnings. The ‘quality’ may in this case be measured by a wife’s schooling; the

‘quantity’ may be measured by the number of years of marriage and by the

time the wife spends dedicated to improving her husband’s knowledge and

well-being.2

We found that the positive effect of a non-working wife’s education on her

husband’s earnings is greater than that of a working wife’s. Moreover, the effect

of a wife’s schooling increases with the length of marriage only in the case of a

non-working wife, who has more time to devote to improving her husband’s

human capital than a working wife. We also found evidence that a wife’s school-

ing is positively associated with at least one particular aspect of her husband’s

human capital: health. In the analysis below, we will use a switching regression

model to address a possible endogeneity bias arising from a wife’s labor supply

decision.

The rest of this paper is organized as follows. In the next section, we will

explain our conceptual framework and set out our estimation strategy. Section III

describes the dataset. Section IV presents the estimation results. Section V

concludes.

1 It is widely observed that a wife’s human capital positively influences her husband’s earnings (e.g.

in Israel (Neuman and Ziderman, 1992), Iran (Scully, 1979), the Philippines (Boulier and Rosenzweig,

1984), Malaysia (Amin and Jepsen, 2005) and Brazil (Lam and Shoeni, 1993, 1994)).

2 Using US census data from 1960 to 2000, Jepsen (2005) finds that a husband’s earnings increase

with his wife’s education. However, the magnitude of the effect declines over cohorts, and Jepsen

conjectures that the rapid increase in a wife’s labor supply reduces her time to improve her husband’s

productivity.

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© 2013 The Authors

Asian Economic Journal © 2013 East Asian Economic Association and Wiley Publishing Asia Pty Ltd