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Earnings Inequality and the Changing Association between Spouses' Earnings
1University of Wisconsin-Madison.
AJS; American Journal of Sociology
|July 27, 2010
Summary
Rising earnings correlation between spouses amplifies income inequality. Without these changes, inequality among married couples would have been 25%-30% lower between 1967 and 2005.
Area of Science:
- Economics
- Sociology
- Demography
Background:
- Marriages increasingly feature partners with similar earnings (homogamy).
- This trend has the potential to exacerbate income inequality.
- Understanding the magnitude of this effect is crucial for economic policy.
Purpose of the Study:
- To analyze trends in the association between spouses' earnings from 1967 to 2005.
- To quantify the contribution of these trends to overall earnings inequality among married couples.
- To explore the components driving these changes across the earnings distribution.
Main Methods:
- Utilized log-linear models for statistical analysis.
- Employed data from the March Current Population Survey (CPS).
- Examined a time span from 1967 to 2005.
Main Results:
- Found a significant increase in the association between spouses' earnings over the study period.
- Estimated that increased earnings correlation accounted for 25%-30% of observed earnings inequality growth.
- Identified specific components contributing to these changes, varying by earnings level.
Conclusions:
- Changes in spouse earnings association significantly contribute to rising income inequality.
- Policies addressing income inequality should consider assortative mating patterns.
- Further research can explore the socioeconomic factors driving these assortative mating trends.
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