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
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