Abstract
We estimate the extent to which rising family income inequality can be explained by changes in the earnings of married women. We develop a decomposition equation that separates single persons from married couples (decomposition by population group) and, for married couples, distinguishes the impact of wives ’ earnings from other sources of income (decomposition by income source). Despite the rising correlation between husbands’ and wives’ earnings, changes in wives ’ earnings do not explain a substantial portion of the increase in family income inequality. Our results contradict those of some previous analyses. The inconsistency of recent esti-mates can be traced to the use of a variety of conceptually different approaches in the previous literature. We clarify these approaches by explicitly distinguishing the conceptual issues, analyzing the empirical components, and providing comprehensive estimates.
