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The standard model of household behavior predicts that couples cooperate to maximize family income. This paper shows that gender identity norms repre- sent an important friction preventing family income maximization. For identi- fication, we focus on an Italian policy that grants a large tax credit to the main earner in a couple when the second earner reports income below a cutoff. Using new tax returns data, we show large bunching responses at the tax credit cut- off from second earner women, but no response from second earner men. This result suggests that household decisions are not Pareto-efficient when men are the second earner within the couple. Gender differences in bunching mostly emerge after marriage and childbirth, and do not reflect any gender-specific dif- ference in scope for bunching. In support of the view that gender norms drive our results, we find that gender differences in bunching are relatively larger among immigrants coming from more conservative societies, and natives liv- ing in more gender-traditional municipalities. Additionally, these results have important implications for gender inequality: we show that the spouse tax credit persistently limits women’s careers and amplifies the gender income gap.

State interventions to decrease the gender wage gap are often criticized for creating one-approach-forall which may be inappropriate for the specific difficulties faced by each sector and firm. In this paper, I study a unique policy where French firms were mandated by law to negotiate agreements on gender equality with union representatives. I estimate the causal effect of the signature of such agreements on the wage gap and other measures of gender inequalities. Using a unique combination of administrative datasets, I exploit the staggered signature of agreements over the 2010-2013 period and find that the law had an effect on the signature of those agreements but did not alter the gender wage gap nor many other outcomes reflecting gender inequalities. The absence of gender-related changes can plausibly be explained by the lack of obligation of result in the law and by the weak oversight of agreements’ content.