Benefits of women's education within marriage: results for Israel in a dual labor market context

There are particular labor-market contexts in which positive cross-productivity effects of wife's education on husband's earnings are not observed. This is suggested by the results of a recent application of this approach to small family businesses. The question is, would cross-productivity effects also differ across broad occupational categories? The purpose of this article is to probe these issues, using Israeli data. In an earlier article, we suggested that the dual labor market model may be relevant for Israel. To test this proposition, we used the original data set from the previous article. As before, we decomposed the male sample into primary and secondary labor market sectors. Employing a method used by McNabb and Psacharopoulus, the allocation to market sector was based on occupational prestige scores, and workers in low prestige occupations (composing some 29% of the sample) were assigned to the secondary labor market sector. Earnings functions of the Mincer type were estimated for both primary and secondary labor markets using a specification that included variables relating to spouse's education and to the number of years married. Our results, while supporting the notion of a positive cross-productivity effect of wife's education on husband's earnings in the primary sector, found no such effect for the secondary sector. -from Authors