WSJ Your Money Briefing - How the ‘Relocation Penalty’ Hurts Women’s Pay

Episode Date: October 21, 2024

As more people relocate for a job, research shows that couples are more likely to move when it benefits the man, even if the woman’s career would gain more from moving. Wall Street Journal reporter Dalvin Brown joins host J.R. Whalen to discuss the resulting pay gap between men and women. Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Exchanges. The Goldman Sachs podcast featuring exchanges on rates, inflation, and U.S. recession risk. Exchanges on the market impact of AI. For the sharpest analysis on forces driving the markets and the economy, count on exchanges between the leading minds at Goldman Sachs. New episodes every week. Listen now. Here's your Money Briefing from Monday, October 21st. I'm JR Whalen for The Wall Street Journal. With fewer of us working remotely full-time, more people are relocating to take a job.

When couples decide to move, it's often the man who gets the bigger raise. That's the relocation penalty for women. It's a big reason why women's pay lags behind men's. It's not just about what happens at work, it's about decisions that are made within the household. And when a couple decides to move, it often benefits the man's career, even if it means the woman takes a hit. We'll go through the numbers with Wall Street Journal reporter Dalvin Brown and talk about what you can do to avoid a career setback if you're thinking of moving with a spouse for a job.

That's after the break. When couples relocate for a job, the man tends to benefit more. Wall Street Journal reporter Dalvin Brown joins me. Dalvin, in your story you say couples are moving again for better job opportunities. What's changed about the job market? We're seeing a shift in the job market because remote work, which was popular during the pandemic, is starting to decline. And some of the experts that I spoke to said that they suspect that it will continue to fall as companies embrace hybrid work, but certainly call more people into the office. The share of job seekers relocating for new positions was higher in the first two quarters

of 2024. And that's after hitting a record low in the end of 2023. And because these remote work postings are down across industries like finance and government, moving for a job might be a better opportunity for couples and may even become more common. In what scenarios are couples more likely to move for a job? A study led by a Princeton University professor

found that when couples move, they tend to do so if it's going to boost the man's career more. And that's even if the woman has a very healthy career and maybe even a higher salary. Oh, so they would move for the man's benefit even though it could potentially derail a woman's career track. What's really interesting is that even if the woman stands to benefit from the move, the man stands to benefit more. Researchers studied countries overseas and were able to also extrapolate what that might mean for couples in the US. But generally what they found was that a man's earnings go up between 5 and 10% after a move,

and women tend to stay the same and may even decline. What was the demographic of the couples in this study? The study only focused on opposite sex couples, and what the researchers were really trying to find out is why does this happen? Why is it that when opposite sex couples move, one gender tends to benefit more than the other. What did they find? Why does that happen? What the researchers found was that some of the inequality

that exists between men and women are the result of decisions that are made within the home. And it's not solely workplace bias, which absolutely occurs and can hurt women's careers and has kept women back for quite a long time. It's also some of the decisions that people make at the dinner table about what career move to make

that also may contribute to women getting the short end of the stick. And Labor Department data shows that in 2023, women earned 84 cents for every dollar that a man earned. It's been well documented that women's pay often lags behind men's, like the Labor Department data you just said. Why was this research significant?

This research is important because it highlights something we don't usually talk about, and that's the relocation penalty for women. It's a big reason why women's pay lags behind men's. It's not just about what happens at work, it's about decisions that are made within the household. And when a couple decides to move, it often benefits the man's career, even if it means the woman takes a hit.

How long does that pay inequality usually last? It can last a long time. Some of the women I spoke to in my story said that it could take five years or longer to get back to the salary that they made before they moved. What they also say is they never really recoup the amount of money that they could have made or the salary that they would have received

during that time. One piece of data that I looked at studied the military and found that certainly for the two years after a move, the trailing spouse or the one who moved because of the other person's career has a drop in income. And then that drop seemingly continues every single time that they move.

You spoke to a woman who moved from Denmark to England for her husband's career. What did she tell you? One of the things that she mentioned You spoke to a woman who moved from Denmark to England for her husband's career. What did she tell you? One of the things that she mentioned was that moving for a spouse can cause harm far beyond just the salary. She said that the move felt isolating because she was far away from everyone and everything that she had known.

Her degrees, she wasn't able to use them because they didn't cross over to another country. And getting started from scratch was just really challenging while her husband benefited from having connections through work, she said. It's not just that women make less or that moving tends to ding their salary. It's that there's some unknowns and some unforeseen circumstances of trailing someone else's career that they didn't know about going into it.

How did it affect her relationship? Ultimately, the stress of the move contributed to the derailment of her marriage, she said. Years later, she was able to save up enough money and move back to Denmark and start all over again. What can people do to avoid their career being derailed when they move with a spouse? Communication is key. Couples need to have real conversations about what they both want from their careers

and how to make sure that both jobs are considered when making a big move. Experts also told me you should have a contingency plan. and how to make sure that both jobs are considered when making a big move. Experts also told me you should have a contingency plan. So, you know, if we move here because of your career and I'm not happy after a year, what do we do? Having these sort of backup plans can make it easier to decide what's next if one of the people

is like having a harder time building their career or having a harder time even finding a job and it's much easier to have those conversations and decide what to do in advance than it is Once you're there and you've essentially started your whole lives all over again That's WSJ reporter Dalvin Brown and that's it for your money briefing This episode was produced by Zoe Culkin, with Deputy Editor Chris Zinsley. I'm JR Whelan for The Wall Street Journal. Thanks for listening.