On the evidence of a working spouse penalty in the managerial labor market

This analysis of March 1993 Current Population Survey data suggests that ma nagers with working wives earn lower wages than their counterparts with non -working wives. The labor supply decisions of managers' wives appear to be unaffected by (that is, "exogenous" with respect to) their husbands' wages. In contrast, there is evidence that the labor supply decisions of non-mana gers' wives are affected by their husbands' wages, and when the analysis ta kes account of that endogeneity, it is found that non-managers do not suffe r a working spouse penalty. The analysis also highlights some important iss ues related to the use of instrumental variables.