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Trends in Earnings Inequality and Earnings Instability among U.S. Couples: How Important is Assortative Matching?

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  • Dmytro Hryshko
  • Chinhui Juhn
  • Kristin McCue

Abstract

We examine changes in inequality and instability of the combined earnings of married couples over the 1980-2009 period using two U.S. panel data sets: Social Security earnings data matched to Survey of Income and Program Participation panels (SIPP-SSA) and the Panel Study of Income Dynamics. Relative to male earnings inequality, the inequality of couples' earnings is both lower in levels and rises by a smaller amount. We also find that couples' earnings instability is lower in levels compared to male earnings instability and actually declines in the SIPP-SSA data. While wives' earnings played an important role in dampening the rise in inequality and year-to-year variation in resources at the family level, we find that marital sorting and coordination of labor supply decisions at the family level played a minor role. Comparing actual couples to randomly paired simulated couples, we find very similar trends in earnings inequality and instability.

Suggested Citation

  • Dmytro Hryshko & Chinhui Juhn & Kristin McCue, 2015. "Trends in Earnings Inequality and Earnings Instability among U.S. Couples: How Important is Assortative Matching?," Working Papers 15-04, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:15-04
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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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