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Spouses' Income Association and Inequality: A Non-Linear Perspective

Author

Listed:
  • Shoshana Grossbard
  • Lucia Mangiavacchi
  • William Nilsson
  • Luca Piccoli

Abstract

We analyze the association between spouses' incomes using a rank-rank specification that takes non-linearities along both spouses' income distribution into account. We also document that the relationships between income and labor force participation and income and couple formation are non-linear. Using simulations, we then analyze how changes in spouses' rank-dependence structure, labor force participation and couple formation contribute to the upsurge of income inequality in the U.S between 1973 and 2013. We find that an increased tendency towards positive sorting contributed substantially to the rise in inequality among dual-earner couples, but contributed little to overall inequality across households. When considering all households, the factor accounting most for the increased inequality during this period is an increased tendency for individual men and women to remain single.

Suggested Citation

  • Shoshana Grossbard & Lucia Mangiavacchi & William Nilsson & Luca Piccoli, 2019. "Spouses' Income Association and Inequality: A Non-Linear Perspective," Working Papers 2019-076, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2019-076
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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Grossbard_Mangiavacchi_Nilsson_etal_2019_spouses-income-inequality.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    income inequality; assortative mating; female labor supply; Marriage; fertility; rank dependence;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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