Wage Inequality and Family Labor Supply
University of Houston - Department of Economics; Institute for the Study of Labor (IZA)
Kevin M. Murphy
University of Chicago; National Bureau of Economic Research (NBER)
NBER Working Paper No. w5459
Using data from the March CPS and the 1960 Census, this paper describes earnings and employment changes for married couples in different types of households stratified by the husband's hourly wage. While the declines in male employment and earnings have been greatest for low wage men, employment and earnings gains have been largest for wives of middle and high wage men. These findings cast doubt on the notion that married women have increased their labor supply in the recent decades to compensate for the disappointing earnings growth of their husbands. We conclude that own wage effects dominate cross effects between husband and wife in accounting for changes in male and female employment.
Number of Pages in PDF File: 46
Date posted: June 25, 1998