The impact of wives’ earnings on income inequality: Issues and estimates

Maria Cancian · Deborah Reed

141 citations0/0 files storedDemography

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Income, Poverty, and Inequality Labor market dynamics and wage inequality Gender, Labor, and Family Dynamics

Abstract

We estimate the extent to which rising family income inequality can be explained by changes in the earnings of married women. We develop a decomposition equation that separates single persons from married couples (decomposition by population group) and, for married couples, distinguishes the impact of wives' earnings from other sources of income (decomposition by income source). Despite the rising correlation between husbands' and wives' earnings, changes in wives' earnings do not explain a substantial portion of the increase in family income inequality. Our results contradict those of some previous analyses. The inconsistency of recent estimates can be traced to the use of a variety of conceptually different approaches in the previous literature. We clarify these approaches by explicitly distinguishing the conceptual issues, analyzing the empirical components, and providing comprehensive estimates.

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References

1992Changes in Relative Wages, 1963-1987: Supply and Demand Factors 1992U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations 1997Cross-National Comparisons of Earnings and Income Inequality 1991Five Decades of Educational Assortative Mating 1985Income Inequality Effects by Income Source: A New Approach and Applications to the United States 1995Demographic Change, Rising Earnings Inequality, and the Distribution of Personal Well-Being, 1959–1989 1998Assessing the Effects of Wives' Earnings on Family Income Inequality 1992The Trend in Inequality Among Families, Individuals, and Workers in the United States: A Twenty-Five-Year Perspective

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2006Family structure and income inequality in families with children, 1976 to 2000 2008Economic Change and the Structure of Opportunity for Less-Skilled Workers 2016Marital Sorting, Inequality and the Role of Female Labour Supply: Evidence from East and West Germany 2003How Will Recent Patterns of Earnings Inequality Affect Future Retirement Incomes 2018

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