Not at all. Imagine a person with a choice between working a $40,000/year job -- an amount higher than the average personal income -- or doing domestic labor.
Of the $40,000, the government will take some $10,000 in federal and state taxes, another $10,000 in disqualification from income-based social assistance programs and you lose another $10,000 to transportation expenses to get to the job. The domestic labor still needs to be done (and having your spouse do it instead is just square one), so now you need to hire a nanny, a housekeeper, a tutor and a landscaper and pay more to eat less healthy takeout food more often. While spending less time with your children and having a much less flexible schedule.
The people who choose differently are not inherently behaving irrationally or producing any inefficiency.
It's from 2014, and basically says that an increase in $40,000 in parental income (that is, incoming money today) would translate to an increase in the child's expected income at age 30 of about $13,000. If you're going to say that choosing domestic labour over a $40,000 job is economically rational, that's what it's got to beat.
There are, of course, other drivers for parents. No parent is perfectly rational in an economic sense. That's why I qualified my comment.
That paper is measuring parental income, but it's comparing e.g. a person who makes $30K against a person who makes $70K even if they both work the same number of hours. Obviously the second person will then be better off, because there is no opportunity cost for the extra money, even if they lose most of it to government and other costs. There is no additional transportation expense or childcare expense or anything like that, it's just comparing janitors with lawyers, and on top of that not even accounting for parents with marketable skills passing them on to their children.
And it's measuring averages against instances. There are people -- especially higher income people -- who don't lose as much of their additional income to costs. If you already make a lot your real marginal tax rate is lower because you already don't qualify for income-based assistance, and you would have bought a second car either way, you would have eaten in restaurants either way, etc. And at the other end, unemployed single parent or two unemployed parents vs. one parent with any job is going to be a huge difference.
But that isn't the question. It isn't that it never makes sense for both parents to take a job, it's a question of whether it ever makes sense for one parent not to. Because if it ever does, that affects the average.
It's a hackneyed cliche, but the plural of anecdote is not data. I'm saying that the baseline assumption should be one based on a known baseline, which this paper gives. If there's data to support a decision in a more specific case than the broad grab-bag this paper represents, that would be interesting. Otherwise what you're saying amounts to "one should bet on being an outlier" - and if that's the bet, the payoff has to beat the alternative. Everything you've mentioned will be represented in that average.
The average only matters to you if you're average.
For each person, you have to measure the value of the wages they could earn against the value of the domestic labor they could perform. It's quite plausible that the average value of wages is higher than the average value of domestic labor, but that does not lead to the result that 100.000% of people are better off working for money.
It most plausibly leads to the result that most of the people who do work for wages are better off to do so and most of the people who don't are better off not, because members of the second group are below average at wage labor or above average at domestic labor or have economic circumstances that cause money to be less valuable than time. Which is why they choose the way they do.
This is well in accord with the fact that the majority of working-age women do work for wages. But a large plurality do not, and averages provide no evidence that they are behaving irrationally. Half of everyone will be below average at one thing and a different half of everyone will be above average at the other thing.
Of the $40,000, the government will take some $10,000 in federal and state taxes, another $10,000 in disqualification from income-based social assistance programs and you lose another $10,000 to transportation expenses to get to the job. The domestic labor still needs to be done (and having your spouse do it instead is just square one), so now you need to hire a nanny, a housekeeper, a tutor and a landscaper and pay more to eat less healthy takeout food more often. While spending less time with your children and having a much less flexible schedule.
The people who choose differently are not inherently behaving irrationally or producing any inefficiency.