A Cohort of the Rich the Media Overlook

The research continues to demonstrate that dual-income married couples, especially those who are high-earners, contribute substantially to rising levels of income inequality. Even as the labor-force participation rate of married women has declined since the mid-1990s, the earnings gap separating men and women has narrowed while the income gap separating rich households from all others has actually grown, a disparity driven in large part by the disproportionate growth in the earnings of wives who are married to high-earning husbands.

The latest study, by Christine R. Schwartz of the University of Wisconsin, documents the narrowing of the gender wage gap particularly between men and women married to each other. Using data from the 1968 to 2006 March Current Population Survey representing more than 710,000 married couples, the sociologist estimates that inequality in household income among married-couple households would be about 25 percent to 30 percent lower had there been no increased association, or parity, between the wage earnings of spouses.

In her descriptive statistics, Schwartz found that earnings inequality between families had risen in each of her four measures between 1967 and 2005, as the concentration of earnings among married couples had shifted to the top 20 percent of the earnings distribution. The differences in earnings between the top 20 percent and the bottom 20 percent of couples increased by 87 percent; the differences between the top 20 percent and the middle 60 percent increased by 59 percent.

Much of that shift, claims Schwartz, is due to the increased correlation between the earnings of dual-income couples during the same period, meaning that wives’ earnings rose to more closely approximate their husbands’ earnings. Among these privileged couples, the correlation almost tripled, with most of the change coming during the 1980s and as the earnings of wives with middle- and high-earning husbands experiencing the most rapid growth. Among the factors driving that increased parity is not only the increased percentage of couples with two incomes (from 50 percent in late 1960s to 69 percent in early 2000s) but also the increased likelihood of wives to work outside the home regardless of their husbands’ earnings, a shift from the late 1960s, when wives were disinclined to work as their husbands earned more. This shift helps to explain not only the increased correlation between spouses’ earnings but also increased inequality between families, as the growth in the labor-force participation of wives with middle- and high-earning husbands grew disproportionately to the labor-force participation of wives with low-earning husbands.

Schwartz notes that the trend toward increased parity between husbands’ and wives’ earnings continued even as the percentage of dual-income couples peaked in the mid-1990s at 73 percent. The culprit: the more rapid earnings growth of wives with high-earning husbands, a pattern the sociologist fears will translate into greater inequality between high- and middle-earning couples, even if the percentage of dual-income couples remains constant.

(Christine R. Schwartz, “Earnings Inequality and Changing Association between Spouses’ Earnings,” American Journal of Sociology 115.5 [March 2010]: 1524–57.)