It is common knowledge among empirical labor economists that household-status variables can enter significantly in wage equations. In particular, a substantial marital wage premium for men has been noted. Recently a series of articles in the management literature has argued that an even larger premium accrues to those married men whose wives do not work for pay (single-earner husbands). Our current study arises in response to perceived deficiencies in the conceptual framework and statistical methods used in these studies.

We consider why the gender division of labor is so often enforced by custom and why customary gender divisions of labor generally involve both direction and prohibition. In our formal model, agents first learn skills and then enter the marriage market. We show that wasteful behavior may emerge due to strategic incentives in specialization choice and human capital acquisition and that both problems may be mitigated through a customary gender division of labor. This division is not Pareto improving. Both the distributional effects and welfare gains of a customary gender division of labor decrease as opportunities for market exchange increase.