Labor immobility and the formation of gender wage gaps in local markets

Family ties have an important effect on the wage gap between male and female workers because wives are often more geographically tied to their husband's location, which may not be the best market for the wife's skills. Theory implies a testable inverse relationship between urban size-reflecting labor market size-and male-female wage differentials. Our results indicate that the wage gap between married men and women narrows with urban size. About 17 percent 4 the wage gap between married men and women can be accounted for by urban size-or, more fundamentally, by geographic immobility due to the family tie constraint.