What is the Effect of Housework on the Market Wage, and Can it Explain the Gender Wage Gap?

Does housework reduce the market wage, and if so, does it have a similar impact for males and females? In this paper we survey and evaluate the recent and growing empirical literature on the linkages between housework and the wage rate. The review is motivated by unexplained gender wage gaps across studies, which consider personal and market related factors. We focus on this less studied aspect of wage determination. We consider the required modelling framework, and provide standardized estimated effects of housework on the hourly wage across studies. We evaluate how this literature has addressed potential estimation problems, in particular, the endogeneity of housework, concavity of the housework-wage function, threshold effects, and work effort effects. We conclude that the evidence across OLS, IV, FE and TSLS results casts serious doubt on the idea that the negative female housework-wage relationship is only driven by endogeneity bias or individual-specific characteristics. Yet, much more needs to be done to address modelling and data requirements, and we point out likely and promising future research directions