Household specialization and competition for promotion

Published: 12 March 2024

Author: Spencer Bastani, And Lisa Dickmanns, And Thomas Giebe, And Oliver Guertler, And

We study how the presence of promotion competition in the labor market affects household specialization patterns. By embedding a promotion tournament model in a household setting, we show that specialization can emerge as a consequence of competitive work incentives.This specialization outcome, in which only one spouse invests heavily in his or her career, can be welfare superior to a situation in which both spouses invest equally in their careers. The reason is that household specialization reduces the intensity of competition and provides households with consumption smoothing. The specialization result is obtained in a setting where spouses are equally competitive in the labor market and there is no household production. It is also robust to several modifications of the model, such as varying the number of households, two spouses competing for promotion in the same workplace, and the inclusion of household production.


IFAU-Working paper 2024:7 "Household specialization and competition for promotion" is written by Spencer Bastani at IFAU, Thomas Giebe at Linné University and Lisa Dickmanns and Oliver Gürtler at the University of Cologne. For more information contact Spencer Bastani at