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Spouses' Income Association and Inequality: A Non-Linear Perspective

Shoshana Grossbard (), Lucia Mangiavacchi (), William Nilsson and Luca Piccoli

No 2019-076, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: We analyze the association between spouses' incomes using a rank-rank specification that takes non-linearities along both spouses’ income distribution into account. We also document that the relationships between income and labor force participation and income and couple formation are non-linear. Using simulations, we then analyze how changes in spouses’ rank-dependence structure, labor force participation and couple formation contribute to the upsurge of income inequality in the U.S between 1973 and 2013. We find that an increased tendency towards positive sorting contributed substantially to the rise in inequality among dual-earner couples, but contributed little to overall inequality across households. When considering all households, the factor accounting most for the increased inequality during this period is an increased tendency for individual men and women to remain single.

Keywords: income inequality; assortative mating; female labor supply; Marriage; fertility; rank dependence (search for similar items in EconPapers)
JEL-codes: D31 J12 J22 (search for similar items in EconPapers)
Date: 2019-12
New Economics Papers: this item is included in nep-his and nep-lab
Note: FI
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