Working Wives and Earnings Inequality

John A. Bishop and Jong-Rong Chiou andJohn P. Formby

Working Papers from East Carolina University, Department of Economics

Abstract: The actual influence of working wives on the distribution of earnings is an empirical question. Using a large sample of husbands and wives from the US Current Population Survey (March CPS) public use micro data we investigate the impact of increased labor market activity by married women on earnings inequality over the period 1961-1990. We correct for the enviable reranking of families that occurs when wives' earnings are combined with husbands' earnings. When we evaluate the direct effect of working wives on combined earnings inequality we find that through time the effect of working wives has been to reduce earnings inequality, and that the magnitude of this effect is surprisingly stable.

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