A Tale of Two Decades: Relative Intra-family Earning Capacity and Changes in Family Welfare over Time

Julie L. Hotchkiss, Robert E. Moore, Fernando Rios-Avila, and Melissa R. Trussell

Working Paper 2014-26a
Revised November 2015

Download the full text of this paper (307 KB) Adobe PDF file format

The share of married families in which the wife earns more than her husband has grown significantly during the past few decades. In spite of the higher total earnings these types of families typically experience, the inversion of traditional earnings superiority apparently produces considerable angst for the families. This paper examines how the total welfare of families of different relative earnings structures has fared during two very different decades and finds that families in which the wife is the higher wage earner experienced at least as much welfare gain as families with a different relative earnings structure. The implication is that even if total welfare isn't as high in families with higher earning wives, as recent literature suggests, the welfare of those families is closing in on families of different earnings structures, as their gains in welfare have either surpassed or kept up with welfare gains of other family types during the past three decades.

JEL classification: I30, J22, D19

Key words: joint labor supply, family utility, micro-simulation


This working paper was formerly titled "Changes in Family Welfare from 1994 to 2012: A Tale of Two Decades." The authors thank Anne E. Winkler, Phanindra Wunnava, and participants of the Federal Reserve System Applied Micro meetings for helpful comments. The views expressed here are the authors' and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility.
Please address questions regarding content to Julie L. Hotchkiss (corresponding author), Federal Reserve Bank of Atlanta and Georgia State University, 1000 Peachtree St. NE, Atlanta, GA 30309, julie.l.hotchkiss@atl.frb.org, 404-498-8198; Robert E. Moore, Georgia State University, P.O. Box 3992, Atlanta, GA 30302-3992, rmoore@gsu.edu, 404-413-0056; Fernando Rios-Avila, Levy Economics Institute of Bard College, Annandale-on-Hudson, NY 12504-5000, friosavi@levy.org, 845-758-7711; or Melissa R. Trussell, Georgia Perimeter College, melissa@trussell.biz.
Subscribe to receive e-mail notifications about new papers.