Conflicting identities and social pressure: effects on the long-run evolution of female labour supply

Abstract

Drawing on psychological theories of social identity and cognitive dissonance, we develop a dynamic model for the evolution of female labour supply. We assume that agents, in addition to consumption and leisure, also derive utility from complying with social and personal norms such that deviations from norms induce psychological costs. An important contribution is that we allow for conflicting norms and we assume that the weight of these norms in the agent’s utility is endogenous. We show that conflicting norm incentives may have long-run effects on labour supply: for example, the long-run effect of a wage increase on labour supply is reinforced if agents can adjust the weight attached to a given norm, and that women may be prevented from making a full transition from homemakers to breadwinners if such a transition make them outsiders in society.