Inequality and poverty in the United States: the effects of changing family behavior and rising wage dispersion
AbstractThe trend toward increasing inequality in family income in the United States since the late 1960s is well documented. Among key possible explanations for this increase are rising dispersion in individual earnings, changes in female labor supply decisions, and changes in family composition and living arrangements. We analyze the contribution of these factors to changes in family income inequality and poverty during the years 1969-1998, focusing on labor supply and family structure as behavioral changes but accounting also for changes in the distribution of male earnings. Our analyses rely on conditionally weighted density estimation, a semiparametric decomposition technique recently developed by DiNardo, Fortin, and Lemieux (1996). We also use a relatively novel rank-based distributional exchange to assess the effects of changes in the distribution of male earnings. ; In our empirical work, we first analyze changes between 1969 and 1989, which corresponds roughly to the period of rising inequality that has been the focus of previous work. Our results indicate that rising dispersion of male earnings and the decline of traditional forms of family structure respectively explain up to about three-fourths and about one-half of rising inequality in family income during this period. The impact of changing family structure was most pronounced in the lower half of the distribution. In contrast, the increase in female labor force participation offset rising inequality to some degree, mainly in the upper half of the distribution, although its impact has moved down the distribution over time. In extending the analyses to the 1990s, we find that the rate at which inequality grew slowed after 1989, but the explanatory factors continued to have substantial effects. In each decade, the effects of the explanatory factors on poverty were especially large and followed a pattern similar to that for inequality.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Federal Reserve Bank of San Francisco in its series Working Papers in Applied Economic Theory with number 2000-06.
Date of creation: 2000
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-08-07 (All new papers)
- NEP-DEV-2000-08-07 (Development)
- NEP-LAB-2000-08-07 (Labour Economics)
- NEP-PBE-2000-08-07 (Public Economics)
- NEP-POL-2000-08-07 (Positive Political Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lerman, Robert I, 1996. "The Impact of the Changing US Family Structure on Child Poverty and Income Inequality," Economica, London School of Economics and Political Science, vol. 63(250), pages S119-39, Suppl..
- Shorrocks, Anthony F, 1983. "The Impact of Income Components on the Distribution of Family Incomes," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 311-26, May.
- Juhn, Chinhui, 1992. "Decline of Male Labor Market Participation: The Role of Declining Market Opportunities," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 79-121, February.
- Maria Cancian & Deborah Reed, 1998. "Assessing The Effects Of Wives' Earnings On Family Income Inequality," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 73-79, February.
- Katharine Bradbury, 1996. "Growing inequality of family incomes: changing families and changing wages," New England Economic Review, Federal Reserve Bank of Boston, issue Jul, pages 55-82.
- Burtless, Gary, 1999. "Effects of growing wage disparities and changing family composition on the U.S. income distribution," European Economic Review, Elsevier, vol. 43(4-6), pages 853-865, April.
- Rebecca M. Blank & David Card, 1993. "Poverty, Income Distribution, and Growth: Are They Still Connected," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2), pages 285-340.
- Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-56, February.
- Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
- Delgado, Miguel A & Robinson, Peter M, 1992.
" Nonparametric and Semiparametric Methods for Economic Research,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 6(3), pages 201-49.
- Delgado, Miguel A. & Robinson, Peter M., 1992. "Nonparametric and Semiparametric Methods for Economic Research," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/2357, Universidad Carlos III de Madrid.
- Delgado, Miguel A. & Robinson, Peter M., . "Nonparametric and semiparametric methods for economic research," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/2827, Universidad Carlos III de Madrid.
- Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
- Chinhui Juhn & Kevin M. Murphy, 1996.
"Wage Inequality and Family Labor Supply,"
NBER Working Papers
5459, National Bureau of Economic Research, Inc.
- Richard V. Burkhauser & Mary C. Daly & Andrew J. Houtenville & Nigar Nargis, 2001. "Economic outcomes of working-age people with disabilities over the business cycle: an examination of the 1980s and 1990s," Working Papers in Applied Economic Theory 2001-07, Federal Reserve Bank of San Francisco.
- Jenkins, Stephen P. & Van Kerm, Philippe, 2004.
"Accounting for Income Distribution Trends: A Density Function Decomposition Approach,"
IZA Discussion Papers
1141, Institute for the Study of Labor (IZA).
- Stephen Jenkins & Philippe Kerm, 2005. "Accounting for income distribution trends: A density function decomposition approach," Journal of Economic Inequality, Springer, vol. 3(1), pages 43-61, April.
- Jenkins, Stephen P. & Van Kerm, Philippe, 2004. "Accounting for income distribution trends: A density function decomposition approach," IRISS Working Paper Series 2004-07, IRISS at CEPS/INSTEAD.
- Mary C. Daly & Heather N. Royer, 2000. "Cyclical and demographic influences on the distribution of income in California," Economic Review, Federal Reserve Bank of San Francisco, pages 1-13.
- Miles Corak & Wen-Hao Chen, 2005.
"Child Poverty and Changes in Child Poverty in Rich Countries since 1990,"
Innocenti Working Papers
inwopa05/28, UNICEF Innocenti Research Centre.
- Chen, Wen-Hao & Corak, Miles, 2005. "Child Poverty and Changes in Child Poverty in Rich Countries Since 1990," IZA Discussion Papers 1574, Institute for the Study of Labor (IZA).
- Dean Hyslop & Dave Maré, 2001. "Understanding Changes in the Distribution of Household Incomes in New Zealand Between 1983-86 and 1995-98," Treasury Working Paper Series 01/21, New Zealand Treasury.
- Dean R. Hyslop & David C. Maré, 2003. "Understanding New Zealand's Changing Income Distribution 1983-98: A Semiparametric Analysis," Working Papers 03_16, Motu Economic and Public Policy Research.
- Dean R. Hyslop & David C. Maré, 2004. "Understanding New Zealand s Changing Income Distribution 1983 98:A Semiparametric Analysis," Microeconomics 0402014, EconWPA.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Diane Rosenberger).
If references are entirely missing, you can add them using this form.