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Taking into account interdependence within the family, we investigate the relationship between part‐time work and family wellbeing. We use panel data from the Household, Income and Labor Dynamics in Australia (HILDA) Survey. We find that part‐time women are more satisfied with working hours than full‐time women, and that women's life satisfaction is increased if their partners work full‐time. Male partners' life satisfaction is unaffected by their partners' market hours but is increased if they themselves are working full‐time. Our results are consistent with the gender identity hypothesis.