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Rising Family Income Inequality: The Importance of Sorting

Author

Listed:
  • Deborah Reed

    (Mathematica Policy Research, Inc.)

  • Maria Cancian

    (Institute for Research on Poverty, University of Wisconsin)

Abstract

The distribution of family income reflects the distribution of personal income and the composition of families. We develop a non-parametric measure of the impact that changes in family income relationships have on the distribution of family income. Using data from Annual Social and Economic Supplement (the March files) of the Current Population Survey (CPS) (1968-2003), we find that changes in "income sorting" account for more than half of the increase in family income inequality in the United States over the last three decades. Furthermore, income sorting accounts for an even larger share of the growing gap between middle-income and low-income families. Our results demonstrate that understanding inequality of economic well-being requires going beyond labor earnings and other income sources to examine the composition and work behavior of families.

Suggested Citation

  • Deborah Reed & Maria Cancian, 2012. "Rising Family Income Inequality: The Importance of Sorting," Journal of Income Distribution, Ad libros publications inc., vol. 21(2), pages 3-14, June.
    • Handle: RePEc:jid:journl:y:2012:v:21:i:2:p:3-14
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    File URL: http://pi.library.yorku.ca/ojs/index.php/jid/article/viewFile/31269/33748
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    Cited by:

    1. Pilar Gonalons-Pons & Christine R. Schwartz, 2017. "Trends in Economic Homogamy: Changes in Assortative Mating or the Division of Labor in Marriage?," Demography, Springer;Population Association of America (PAA), vol. 54(3), pages 985-1005, June.
    2. Milan Bouchet-Valat, 2017. "Does women’s employment growth increase wage inequalities between couples? The case of France between 1982 and 2014," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 493, pages 67-85.
    3. Inhoe Ku & Wonjin Lee & Seoyun Lee & Kyounghoon Han, 2018. "The Role of Family Behaviors in Determining Income Distribution: The Case of South Korea," Demography, Springer;Population Association of America (PAA), vol. 55(3), pages 877-899, June.
    4. Emma Calvert & Tony Fahey, 2013. "The Impact of Income Inequality on the Family: A test of a thesis," Working Papers 201302, Geary Institute, University College Dublin.
    5. Diederik Boertien & Milan Bouchet-Valat, 2020. "Are Increasing Earnings Associations Between Partners of Concern for Inequality? A Comparative Study of 21 Countries," LIS Working papers 793, LIS Cross-National Data Center in Luxembourg.

    More about this item

    Keywords

    Family income distribution; inequality; family structure;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D10 - Microeconomics - - Household Behavior - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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