Running hard and falling behind: a welfare analysis of two-earner families

"This paper investigates the commonly asserted proposition that long term economic changes have put the family in a financial bind. Structural parameters of a family utility model are obtained by estimating simultaneous labor supply functions for a two-earner household. We find evidence indicating that the average 1990s two-earner family would prefer to receive the 1980s real wage package (were it available) instead of the real wage package it actually faces. The degree to which the 1990s family is worse off (in terms of the changes in the real wage package) is roughly equivalent to an hour of leisure per week." The data are from the 1993 Current Population Survey and concern the United States.