What happens to earnings upon marriage? Linking administrative and survey data from Germany, we show that there is a marriage earnings gap. Even after accounting for the child penalty, women’s earnings drop by 20% after marriage. We show that the marriage earnings gap results from both the extensive margin (women stop working) and the intensive margin (women work fewer hours), but not from a decrease in hourly wages. Labor supply disincentives from joint taxation can explain about one third of the marriage earnings gap, while we find no effect for labor supply incentives from changes in divorce law. Leveraging variation in norms created by the German separation, we find that gender norms are another important driver behind the marriage earnings gap.

Default setting has been shown to be a powerful tool to enhance enrollment in pension programs, which often involve multidimensional choices and complex choice menus. We document that the effect is less pronounced when the choice menu is simple and it is easy to opt out. We study low-income employees who face a binary choice: to enroll or not to enroll in the German public pension insurance. Using administrative data, we show that program participation increases by 23 percentage points after the introduction of automatic enrollment. However, the majority of individuals actively opt out.  We document that behind this average effect, there is substantial heterogeneity across different groups of individuals. We use linked survey data to further explore this heterogeneity and show that the default is particularly powerful for individuals with low financial literacy.