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Wives' Labor Force Participation, Wage Differentials and Family Income Inequality: The Israeli Experience

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Author Info
Reuben GRonau
Abstract

Recent decades have witnessed a sharp increase in the labor force participation of married women. The paper investigates the effect of wives' earnings on family income distribution. This effect depends on the in-equality of women's earnings as compared with other sources of income, on the correlation between the two and on the woman's share in total income. These in turn depend on participation patterns, labor supply and sex related wage differentials. In general, only the correlation between the various sources of income has an unambiguous effect on inequality, the effects of the other factors depending on the specific values of the parameters. In Israel where there are sharp differences in participation rates of married women and in sex related earnings differentials by schooling group, wives' earnings reduce total family income inequality, increasing at the same time the between-group (ethnic and schooling group) variability. The paper examines the effect of changes in the participation rate and the wife-husband earnings gap on family income inequality. It compares the effect of wives' earnings with other income sources (e.g., transfers) and examines the implication of separate tax returns for inequality.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0668.

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Date of creation: Apr 1981
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Handle: RePEc:nbr:nberwo:0668

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  1. Layard, Richard & Zabalza, Antoni, 1979. "Family Income Distribution: Explanation and Policy Evaluation," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S133-61, October. [Downloadable!] (restricted)
  2. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  3. Benham, Lee, 1974. "Benefits of Women's Education within Marriage," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages S57-S71, Part II, . [Downloadable!] (restricted)
  4. Smith, James P, 1979. "The Distribution of Family Earnings," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 163-92, October.
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