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

36 Pages Posted: 4 Apr 2015

See all articles by Julie L. Hotchkiss

Julie L. Hotchkiss

Federal Reserve Bank of Atlanta; Georgia State University - Department of Economics

Robert Elijah Moore

Georgia State University - Andrew Young School of Policy Studies

Fernando Rios‐Avila

Bard College - The Levy Economics Institute

Melissa Trussell

Georgia State University

Date Written: December 2014

Abstract

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.

Keywords: joint labor supply, family utility, micro-simulation

JEL Classification: I30, J22, D19

Suggested Citation

Hotchkiss, Julie L. and Moore, Robert Elijah and Rios‐Avila, Fernando and Trussell, Melissa, A Tale of Two Decades: Relative Intra-family Earning Capacity and Changes in Family Welfare over Time (December 2014). FRB Atlanta Working Paper No. 2014-26a, Available at SSRN: https://ssrn.com/abstract=2580489 or http://dx.doi.org/10.2139/ssrn.2580489

Julie L. Hotchkiss (Contact Author)

Federal Reserve Bank of Atlanta ( email )

Research Department
1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
404-498-8198 (Phone)
404-498-8058 (Fax)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

Robert Elijah Moore

Georgia State University - Andrew Young School of Policy Studies ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-651-3756 (Phone)
404-651-4985 (Fax)

Fernando Rios‐Avila

Bard College - The Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

Melissa Trussell

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

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