IDEAS home Printed from https://ideas.repec.org/a/spr/joecin/v20y2022i3d10.1007_s10888-022-09539-5.html
   My bibliography  Save this article

Spouses’ earnings association and inequality: A non-linear perspective

Author

Listed:
  • Shoshana Grossbard

    (San Diego State University, HCEO and IZA)

  • Lucia Mangiavacchi

    (University of Perugia and IZA)

  • William Nilsson

    (University of the Balearic Islands)

  • Luca Piccoli

    (University of Trento and IZA)

Abstract

We analyze the association between spouses’ earnings taking account of non-linearities along both spouses’ distribution of earnings. We also document the non-linearity of the relationships between earnings and labor force participation, earnings and couple formation, and earnings and number of children. Using simulations, we then analyze how changes in spouses’ rank-dependence structure, labor force participation and couple formation contribute to the upsurge in inequality in the U.S between 1967 and 2018. We find that an increased tendency towards positive sorting contributed substantially to the rise in inequality only among dual-earner couples, while it contributed little to overall inequality across households. Temporal and distributional heterogeneity are important, as earnings association had a more substantial role in the bottom of the earnings distribution and in recent years. The decline in couple formation contributed substantially to the rise in inequality, while the increase in female labor force participation and the fertility decline had equalizing effects.

Suggested Citation

  • Shoshana Grossbard & Lucia Mangiavacchi & William Nilsson & Luca Piccoli, 2022. "Spouses’ earnings association and inequality: A non-linear perspective," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(3), pages 611-638, September.
    • Handle: RePEc:spr:joecin:v:20:y:2022:i:3:d:10.1007_s10888-022-09539-5
    DOI: 10.1007/s10888-022-09539-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10888-022-09539-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10888-022-09539-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Aloysius Siow, 2015. "Testing Becker's Theory of Positive Assortative Matching," Journal of Labor Economics, University of Chicago Press, vol. 33(2), pages 409-441.
    2. Martin Browning & Pierre-André Chiappori & Arthur Lewbel, 2013. "Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1267-1303.
    3. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    4. Hryshko, Dmytro & Juhn, Chinhui & McCue, Kristin, 2017. "Trends in earnings inequality and earnings instability among U.S. couples: How important is assortative matching?," Labour Economics, Elsevier, vol. 48(C), pages 168-182.
    5. Elizabeth O. Ananat & Guy Michaels, 2008. "The Effect of Marital Breakup on the Income Distribution of Women with Children," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 611-629.
    6. Nico Pestel, 2017. "Marital Sorting, Inequality and the Role of Female Labour Supply: Evidence from East and West Germany," Economica, London School of Economics and Political Science, vol. 84(333), pages 104-127, January.
    7. Jeff Larrimore, 2014. "Accounting for United States Household Income Inequality Trends: The Changing Importance of Household Structure and Male and Female Labor Earnings Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(4), pages 683-701, December.
    8. Jeremy Greenwood & Nezih Guner & Georgi Kocharkov & Cezar Santos, 2014. "Marry Your Like: Assortative Mating and Income Inequality," American Economic Review, American Economic Association, vol. 104(5), pages 348-353, May.
    9. Jeremy Greenwood & Nezih Guner & Georgi Kocharkov & Cezar Santos, 2016. "Technology and the Changing Family: A Unified Model of Marriage, Divorce, Educational Attainment, and Married Female Labor-Force Participation," American Economic Journal: Macroeconomics, American Economic Association, vol. 8(1), pages 1-41, January.
    10. Christine Schwartz & Robert Mare, 2005. "Trends in educational assortative marriage from 1940 to 2003," Demography, Springer;Population Association of America (PAA), vol. 42(4), pages 621-646, November.
    11. Christian Bredemeier & Falko Juessen, 2013. "Assortative Mating and Female Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 31(3), pages 603-631.
    12. Dean R. Hyslop, 2001. "Rising U.S. Earnings Inequality and Family Labor Supply: The Covariance Structure of Intrafamily Earnings," American Economic Review, American Economic Association, vol. 91(4), pages 755-777, September.
    13. Lucia MANGIAVACCHI & Federico PERALI & Luca Piccoli, 2018. "Intrahousehold Distribution in Migrant-Sending Families," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 84(1), pages 107-148, March.
    14. 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.
    15. Shoshana Grossbard, 2015. "The Marriage Motive: A Price Theory of Marriage," Springer Books, Springer, edition 127, number 978-1-4614-1623-4, June.
    16. Lasse Eika & Magne Mogstad & Basit Zafar, 2019. "Educational Assortative Mating and Household Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 127(6), pages 2795-2835.
    17. Sara Mclanahan, 2004. "Diverging destinies: How children are faring under the second demographic transition," Demography, Springer;Population Association of America (PAA), vol. 41(4), pages 607-627, November.
    18. Edoardo Ciscato & Simon Weber, 2020. "The role of evolving marital preferences in growing income inequality," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 307-347, January.
    19. Aaberge, Rolf, 1997. "Interpretation of changes in rank-dependent measures of inequality," Economics Letters, Elsevier, vol. 55(2), pages 215-219, August.
    20. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    21. Grossbard-Shechtman, Shoshana Amyra, 1984. "A Theory of Allocation of Time in Markets for Labour and Marriage," Economic Journal, Royal Economic Society, vol. 94(376), pages 863-882, December.
    22. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-846, July-Aug..
    23. Gianni Betti & Lucia Mangiavacchi & Luca Piccoli, 2020. "Women and poverty: insights from individual consumption in Albania," Review of Economics of the Household, Springer, vol. 18(1), pages 69-91, March.
    24. Geoffrey R. Dunbar & Arthur Lewbel & Krishna Pendakur, 2013. "Children's Resources in Collective Households: Identification, Estimation, and an Application to Child Poverty in Malawi," American Economic Review, American Economic Association, vol. 103(1), pages 438-471, February.
    25. Burkhauser, Richard V. & Larrimore, Jeff & Simon, Kosali I., 2012. "A "Second Opinion" on the Economic Health of the American Middle Class," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(1), pages 7-32, March.
    26. Emmanuel Saez & Gabriel Zucman, 2016. "Editor's Choice Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 519-578.
    27. Becker, Gary S, 1974. "A Theory of Marriage: Part II," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 11-26, Part II, .
    28. Jeff Larrimore & Richard V. Burkhauser & Shuaizhang Feng & Laura Zayatz, 2008. "Consistent Cell Means for Topcoded Incomes in the Public Use March CPS (1976-2007)," NBER Working Papers 13941, National Bureau of Economic Research, Inc.
    29. Burtless, Gary, 1999. "Effects of growing wage disparities and changing family composition on the U.S. income distribution," European Economic Review, Elsevier, vol. 43(4-6), pages 853-865, April.
    30. Wen-Hao Chen & Michael Förster & Ana Llena-Nozal, 2014. "Demographic or labour market trends: What determines the distribution of household earnings in OECD countries?," OECD Journal: Economic Studies, OECD Publishing, vol. 2013(1), pages 179-207.
    31. Joni Hersch, 2013. "Opting out among women with elite education," Review of Economics of the Household, Springer, vol. 11(4), pages 469-506, December.
    32. 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.
    33. Arnaud Dupuy & Simon Weber, 2022. "Marriage Market Counterfactuals Using Matching Models," Economica, London School of Economics and Political Science, vol. 89(353), pages 29-43, January.
    34. Maria Cancian & Deborah Reed, 1998. "Assessing The Effects Of Wives' Earnings On Family Income Inequality," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 73-79, February.
    35. Maria Cancian & Deborah Reed, 1999. "The impact of wives’ earnings on income inequality: Issues and estimates," Demography, Springer;Population Association of America (PAA), vol. 36(2), pages 173-184, May.
    36. John Iceland, 2003. "Why poverty remains high: The role of income growth, economic inequality, and changes in family structure, 1949–1999," Demography, Springer;Population Association of America (PAA), vol. 40(3), pages 499-519, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Sasiwimon Warunsiri PAWEENAWAT & Lusi LIAO, 2023. "Educational assortative mating and income inequality in Thailand," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 89(2), pages 283-298, June.
    3. Leo Azzollini & Richard Breen & Brian Nolan, 2023. "Demographic behaviour and earnings inequality across OECD countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 21(2), pages 441-461, June.
    4. Nicolas Frémeaux & Arnaud Lefranc, 2020. "Assortative Mating and Earnings Inequality in France," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(4), pages 757-783, December.
    5. Nie, Haifeng & Xing, Chunbing, 2019. "Education expansion, assortative marriage, and income inequality in China," China Economic Review, Elsevier, vol. 55(C), pages 37-51.
    6. Nico Pestel, 2017. "Marital Sorting, Inequality and the Role of Female Labour Supply: Evidence from East and West Germany," Economica, London School of Economics and Political Science, vol. 84(333), pages 104-127, January.
    7. Lasse Eika & Magne Mogstad & Basit Zafar, 2019. "Educational Assortative Mating and Household Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 127(6), pages 2795-2835.
    8. Carlo V. FIORIO & Stefano VERZILLO, 2018. "Looking in Your Partner’s Pocket Before Saying “Yes!" Income Assortative Mating and Inequality," Departmental Working Papers 2018-02, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    9. , Stone Center & Yonzan, Nishant, 2020. "Assortative Mating and Labor Income Inequality: Evidence from Fifty Years of Coupling in the U.S," SocArXiv 4whvs, Center for Open Science.
    10. Bernt Bratsberg & Simen Markussen & Oddbjørn Raaum & Knut Røed & Ole Røgeberg, 2023. "Trends in Assortative Mating and Offspring Outcomes," The Economic Journal, Royal Economic Society, vol. 133(651), pages 928-950.
    11. Edoardo Ciscato & Simon Weber, 2020. "The role of evolving marital preferences in growing income inequality," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 307-347, January.
    12. Omoniyi Alimi & David C Maré & Jacques Poot, 2018. "Who partners up? Educational assortative matching and the distribution of income in New Zealand," Working Papers 18_13, Motu Economic and Public Policy Research.
    13. 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.
    14. Espinosa, Hector & Guzman, Ivan, 2018. "Mercado Matrimonial Dominicano: Impacto del Nivel de Educación en el Proceso de Selección de Parejas y su Vinculación con el Mercado Laboral [Marriage Market in the Dominican Republic: Impact of Ed," MPRA Paper 92112, University Library of Munich, Germany.
    15. Lauren HOEHN-VELASCO & Jacob PENGLASE, 2023. "Changes in assortative matching and educational inequality: evidence from marriage and birth records in Mexico," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 89(4), pages 587-607, December.
    16. Laurens Cherchye & Bram De Rock & Khushboo Surana & Frederic Vermeulen, 2020. "Marital Matching, Economies of Scale, and Intrahousehold Allocations," The Review of Economics and Statistics, MIT Press, vol. 102(4), pages 823-837, October.
    17. Omoniyi B. Alimi & David C. Maré & Jacques Poot, 2022. "Who partners up? Homogamy and income inequality in New Zealand cities," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 171-193, January.
    18. Nybom, Martin & Plug, Erik & van der Klaauw, Bas & Ziegler, Lennart, 2022. "Skills, Parental Sorting, and Child Inequality," IZA Discussion Papers 15824, Institute of Labor Economics (IZA).
    19. 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.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joecin:v:20:y:2022:i:3:d:10.1007_s10888-022-09539-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.