Ladies and gentlemen, in addition to this “price of time effect”, the “income effect” states that women whose husbands have higher incomes may be able to afford to stay at home. Traditionally, the better educated woman has a higher earning husband. Consequently, while her higher education encourages her to work, her husband’s income discourages her from joining the labor force.
Conversely, in the case of the lower educated woman, her low earning power will discourage employment at the same time that her husband’s low income will stimulate her labor participation. Empirical research across countries has shown that cultural factors largely determine whether the “price of time effect” or the “income effect” dominates.