Australian attitudes towards women remain more conservative than in many other OECD countries. The authors examine the effect of these norms on female labour outcomes and intra-household dynamics using a peer effects model and nearly two decades of longitudinal household survey data. 

The results indicate that conservative gender norms are costly to individual women and are an important determinant of gender inequality, resulting for women in lower lifetime rates of labour force participation and suppressed lifetime earnings trajectories. Estimated effects are large in magnitude: shifting norms to be one standard deviation more egalitarian would eliminate three-quarters of the gender gap in employment and around two-thirds of the gender pay gap. More egalitarian peer norms are also associated with increased household incomes, a more equitable division of unpaid domestic work, and greater overall life satisfaction.