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Wives' work and income distribution in European countries

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  • Silvia Pasqua

Abstract

Women's participation in the labour market varies substantially across Europe. While female participation rates are usually high in Northern countries, they decline as one moves South, where more traditional household models still predominate and women devote more time to domestic rather than to labour-market activities. At the same time, income is more equally distributed in Northern than in Southern European countries. This paper takes a cross-country approach to analyse the impact of wives' work on income distribution, using the last wave of the ECHP (European Community Household Panel) data set. Decompositions of inequality measures and counterfactual distributions are used to assess the impact of higher female employment rates on inequality in household income distribution. The decomposition of inequality by household type shows that income in all the countries studied is distributed more equally among dual-earner than among male-breadwinner households. Since the percentage of dual-earner families is higher in Northern European countries, inequality is lower. Sub-group analysis also shows that within-group inequality is the main source of inequality in all countries concerned, while between-groups inequality has a lower impact. Decomposition by sources of income reveals that, in European countries, women's earnings account for a lower proportion of overall inequality than men's earnings and that the impact of women's work on income distribution is mainly due to the "employment effect": wherever women work less, inequality in women's earnings distribution is higher, due to the higher number of zero values in the distribution. Moreover, analysis of inequality among working wives shows that female labour income is often distributed more equally where women's employment rate is higher. Finally, counterfactual distributions are used to show that an increase in women's participation in the labour market can cause a decrease in household income distribution inequality.

Suggested Citation

  • Silvia Pasqua, 2008. "Wives' work and income distribution in European countries," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 5(2), pages 157-186, December.
  • Handle: RePEc:liu:liucej:v:5:y:2008:i:2:p:157-186
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    Cited by:

    1. Márton Medgyesi, 2014. "Components of income inequality and its change in EU countries, 2004-2010," ImPRovE Working Papers 14/01, Herman Deleeck Centre for Social Policy, University of Antwerp.
    2. Raymundo M. Campos Vázquez & Andrés Hincapie & Rubén I. Rojas Valdés, 2011. "Family Income Inequality and the Role of Wives Earnings in Mexico: 1988-2010," Serie documentos de trabajo del Centro de Estudios Económicos 2011-07, El Colegio de México, Centro de Estudios Económicos.
    3. Seonglim Lee & Jinkook Lee & Yunhee Chang, 2014. "Is Dual Income Costly for Married Couples? An Analysis of Household Expenditures," Journal of Family and Economic Issues, Springer, vol. 35(2), pages 161-177, June.
    4. Raymundo M. Campos-Vázquez & Andrés Hincapié & Ruben Irvin Rojas-Valdés, 2012. "Family Income Inequality and the Role of Married Females' Earnings in Mexico: 1988-2010," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 49(1), pages 67-98, May.
    5. Rense Nieuwenhuis & Henk Van der Kolk & Ariana Need, 2016. "Women’s Earnings and Household Inequality in OECD Countries, 1973–2013," LIS Working papers 598, LIS Cross-National Data Center in Luxembourg.
    6. Rense Nieuwenhuis & Ariana Need & Henk Van der Kolk, 2017. "Family Policies, Women’s Earnings, and Relative Inequality Among Households: Trends in 18 OECD Countries from 1981 to 2008," LIS Working papers 599, LIS Cross-National Data Center in Luxembourg.

    More about this item

    Keywords

    Female employment ; Inequality decomposition;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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