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The Distribution of Family Earnings

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  • James P. Smith

    (RAND Corporation)

Abstract

This paper investigates the influence of wives' earnings on the distribution of family earnings. In the process some differences in the manner in which family earnings are distributed within racial groups are highlighted. Earnings of wives equalize income distributions in white families but increase dispersion among blacks. Because they have conflicting effects, covariances between spouses in their wage rates and labor supply are isolated. Male and female wage functions are adjusted for sample censoring to fill out the true population variances and covariances in wages across all families. Due to the larger positive correlation in wages of black spouses, black family earnings would be distributed more unequally even if all individuals worked the same amount. Our labor supply analysis indicates that white families attempt to stabilize family earnings with some family members increasing their labor supply in response to a decline in participation of other family members. This compensatory function of wives' earnings is much less prevalent in black families.

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Bibliographic Info

Paper provided by EconWPA in its series Labor and Demography with number 0408010.

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Length: 30 pages
Date of creation: 16 Aug 2004
Date of revision:
Handle: RePEc:wpa:wuwpla:0408010

Note: Type of Document - pdf; pages: 30. Journal of Political Economy, Vol. 87, No. 5, 1979, pp. S163-S192
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Web page: http://128.118.178.162

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Cited by:
  1. Audrey Light, 2003. "Gender Differences in the Marriage and Cohabitation Income Premium," Working Papers 03-04, Ohio State University, Department of Economics.
  2. Stephen Nord, 1983. "An Interstate Analysis of Changes in Nonwhite and White Family Incomes 1960 to 1970," Eastern Economic Journal, Eastern Economic Association, vol. 9(1), pages 13-21, Jan-Mar.
  3. John Pencavel, 2005. "A Life Cycle Perspective on Changes in Earnings Inequality Among Married Men and Women," Discussion Papers 04-036, Stanford Institute for Economic Policy Research.
  4. Pencavel, John, 2006. "Earnings Inequality and Market Work in Husband-Wife Families," IZA Discussion Papers 2235, Institute for the Study of Labor (IZA).
  5. Åström, Johanna, 2009. "The Effects of Assortative Mating on Earnings: Human Capital Spillover or Specialization?," HUI Working Papers 34, HUI Research.
  6. repec:fth:prinin:339 is not listed on IDEAS
  7. John M. Nunley, 2007. "The Effects of Household Income Volatility on Divorce," Working Papers 200718, Middle Tennessee State University, Department of Economics and Finance.
  8. Gustman, Alan L. & Steinmeier, Thomas L., 2001. "How effective is redistribution under the social security benefit formula?," Journal of Public Economics, Elsevier, vol. 82(1), pages 1-28, October.
  9. Robert Swidinsky, 1983. "Working Wives, Income Distribution and Poverty," Canadian Public Policy, University of Toronto Press, vol. 9(1), pages 71-80, March.
  10. James Smith & Michael Ward, 1980. "Asset Accumulation And Family Size," Demography, Springer, vol. 17(3), pages 243-260, August.
  11. Reuben GRonau, 1981. "Wives' Labor Force Participation, Wage Differentials and Family Income Inequality: The Israeli Experience," NBER Working Papers 0668, National Bureau of Economic Research, Inc.
  12. Åström, Johanna, 2011. "The Effects of Spousal Education on Individual Earnings – A Study of Married Swedish Couples," HUI Working Papers 32, HUI Research.
  13. Lehrer, Evelyn L., 2000. "The impact of women's employment on the distribution of earnings among married-couple households: a comparison between 1973 and 1992-1994," The Quarterly Review of Economics and Finance, Elsevier, vol. 40(3), pages 295-301.
  14. Younghwan Song, 2007. "The working spouse penalty/premium and married women’s labor supply," Review of Economics of the Household, Springer, vol. 5(3), pages 279-304, September.
  15. Casey B. Mulligan & Yona Rubinstein, 2004. "Household vs. Personal Accounts of the U.S. Labor Market, 1965-2000," NBER Working Papers 10320, National Bureau of Economic Research, Inc.
  16. McKinley L. Blackburn & David E. Bloom, 1994. "Changes in the Structure of Family Income Inequality in the United States and Other Industrial Nationa During the 1980s," NBER Working Papers 4754, National Bureau of Economic Research, Inc.

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