Family Income Composition
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Family Income Composition
KRISTIN E. SMITH
Abstract
Family income has increased overall in the United States since the 1950s, but
increased prosperity has not been distributed evenly, with family economic
well-being increasing more for some families than others. The end result has been
increased family income inequality. Married couple families with a wife in the labor
force have seen the largest gains over the decades. In general, families experienced
increased prosperity over the 1950s and 1960s, a time when earnings increased for
men and women. Starting in the early 1970s, however, the gap between families
with a wife in the labor force and other families expanded markedly, as men’s wage
inequality grew and women’s earnings continued to rise. This resulted in a flat
trend line for families dependent only on men’s earnings. Meanwhile, female-led
families have seen only modest increases in family income. This uneven growth in
family income has its roots in demographic changes in the family, the focus of this
essay. Markedly, the rise in women’s employment and earnings, the rise in men’s
wage inequality, and shifts in family structure and increased marital homogamy on
earnings all contributed to the shifts in family income composition.
INTRODUCTION
Since the 1940s, American households and families have experienced
increased prosperity. Median family earnings have risen dramatically from
$27,255 in 1947 to $62,241 in 2012 (in constant 2012 dollars) (US Census
Bureau, 2012a). Household income and wealth have also risen. But has the
rising tide lifted all Americans, regardless of family type, or is there variation
by family composition, such that some have benefitted to a larger extent
than others? This essay examines the role of demographic shifts in the family
and how they contributed to a change in family earnings composition.
American families have higher earnings overall since the 1950s, yet
increased prosperity has not been distributed evenly, leading to economic
progress for some families and stagnation for others. The end result has
been increased inequality among different household types. Winners clearly
are those with two earners contributing to the family coffers, signaling the
Emerging Trends in the Social and Behavioral Sciences. Edited by Robert Scott and Stephen Kosslyn.
© 2015 John Wiley & Sons, Inc. ISBN 978-1-118-90077-2.
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EMERGING TRENDS IN THE SOCIAL AND BEHAVIORAL SCIENCES
Median family income by family type,
1949–2012 (in 2011 dollars)
Married couple, wife in labor force
Married couple, wife not in labor force
Male headed household
Female headed household
$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
64
19
67
19
70
19
73
19
76
19
79
19
82
19
85
19
88
19
91
19
94
19
97
20
00
20
03
20
06
20
09
20
12
61
19
58
19
55
19
52
19
19
19
49
$0
Figure 1 Median family income by family type, 1949–2012 (in 2011 dollars).
Source: US Census Bureau, Current Population Survey, Annual Social and
Economic Supplements. Table F-7. Type of Family, All Races by Median and Mean
Income: 1947 to 2012. http://www.census.gov/hhes/www/income/data/historical/
families/
rise in the importance of wives’ as breadwinners, and also highlighting
the rise in income inequality. For example, Figure 1 shows that the median
family income of married couples with a wife in the labor force1 rose
dramatically over the years. Over the 1950s and 1960s, family incomes grew
across all family types, with all experiencing increased prosperity owing to
broad-based wage growth for both men and women (Danziger & Gottschalk,
1995). However, beginning in the 1970s, the gap between families with a
wife in the labor force and other families expanded notably, as men’s wage
inequality grew and women’s earnings continued to rise. Stagnant men’s
wages at the lower and middle of the distribution of men’s earnings resulted
in the flat trend lines seen in Figure 1 for families dependent only on men’s
earnings. Meanwhile, female-led families have seen only modest increases
in family income.2
This uneven growth in family income has its roots in demographic changes
in the family, the focus of this essay, although there are other factors that
1. Given the high employment rate among married men and the low percentage of wife sole earner
families, families with a wife in the labor force are typically dual-earner couples.
2. This figure displays median family income; thus, single individuals are not included.
Family Income Composition
3
contributed to the uneven growth in income.3 The rise in women’s employment and shifting family structure—two of the most important changes in
American family life—have fueled the change in family income composition. No longer do families rely solely on the male head of household for
economic security, and no longer are families typically comprised of two
married parents. The rise of women as breadwinners within married couples
and as single mothers are undeniably marked changes from the 1950s, which
directly impact who contributes economically to the family and how the composition of earnings has shifted. The topic of family earnings composition
cuts across many disciplines, including sociology, economics, demography,
family studies, gender studies, psychology, and child development, among
others. This topic is at the heart of the well-being of women and families,
and children in particular. The rise in income inequality speaks to the growing disparities among families and their diverging destinies based on their
economic fortune. The rise in women as breadwinners is also poignant for
gender relations and gender equality.
FOUNDATIONAL RESEARCH
The American family has undergone a transformation since the 1950s. A
subject that has garnered much academic attention, classic sociological
and demographic studies by Glick (1977), Cherlin (1981), Hochchild with
Machung (1989), and Bianchi and Spain (1996) describe changes in family
structure, marriage, divorce, and women’s roles within the family and the
workplace. In the past, the typical sequence of life events for women was to
complete high school, marry and move out of the parental home, and bear
children within marriage (Glick, 1977). A minority of women worked for
pay, but often only before marriage (Bianchi and Spain, 1996).4 On the other
hand, men typically completed schooling, entered the labor force, married,
and left the parental home. Divorce and remarriage were uncommon and
few women had children outside of marriage (Cherlin, 1981).
The American family looks very different today. Women have entered
paid employment in unprecedented numbers, such that nowadays it is
more common for women to be employed than not (Casper & Bianchi,
2002). Marriage is delayed, divorce is more prevalent, and it is increasingly
common for women to bear children outside of marriage (Cherlin, 1981).
This translates into an increasing percentage of children raised by single
parents, usually the mother (McLanahan & Sandefur, 1994). Furthermore, a
3. There are other macro-economic factors contributing to the uneven growth in earnings, such as
economic restructuring, globalization, and institutional factors (refer to Morris & Western, 1999, for a full
discussion of how these factors contributed to income inequality in the United States).
4. This pattern was most common for white, middle-class women; black women have historically had
high labor force participation rates, even after the birth of a child (see, e.g., Jones, 2010).
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EMERGING TRENDS IN THE SOCIAL AND BEHAVIORAL SCIENCES
more select group of individuals marry today than in the past, with those
with higher education and earnings marrying and bearing and raising
children within marriage, and those with low levels of education and
earnings foregoing marriage and bearing and raising children outside of
marriage (Edin & Kefalas, 2005; Schwartz, 2010).
What is behind this large rise in income among families with a wife in the
labor force and the burgeoning gap between these families and the other
family types? One factor undoubtedly is the increase in married women’s
commitment to the labor force. Cohen and Bianchi (1999) document the rise
in employed women’s work hours and the changing effects of the determinants of women’s hours spent working for pay. Specifically, they show a
diminishing effect of other family income, marital status and children, and
an increasing effect of female education level. They also find that married
women increased their average work week from 33.8 h in 1978 to 36.4 h in
1998. Longer work hours on the part of wives alone could push up the annual
family income of married couples with a wife in the labor force.
A second factor contributing to the rise in family income among married
couples with a wife in the labor force is the rise in women’s earnings,
absolutely and relative to men’s. In 2012, employed women’s median annual
earnings were $21,520, up from $9,145 in 1947 (in constant 2012 dollars)
(US Census Bureau, 2012b). In their groundbreaking study, The Economics of
Women, Men, and Work, Blau, Ferber and Winkler (1986) were among the first
to shed light on the rise in women’s earnings and thoroughly explore gender
issues regarding work and family through an economics lens. The role of
women’s increasing education and the movement of women into more
prestigious and higher paying jobs on their increased earnings has been
examined in a paper by Cotter, Hermsen, and Vanneman (2004). Furthermore, studies examining the trends in women’s labor force continuity have
found an increase in the proportion of years worked, providing evidence of
women’s increased commitment to the labor force (Rexroat, 1992; Rosenfeld,
1996). Women’s longer work hours coupled with the higher education
levels and workforce experience have collectively worked to increase their
earnings, which in turn has been a major driver in the rise in family income
among married couples with a wife in the labor force.
At the same time, men’s earnings overall have not risen to the same extent
as women’s. Over the time period from 1947 to 2012, men’s earnings rose by
69% while women’s earnings more than doubled (in constant 2012 dollars).
Yet, examining change in earnings since 1990 reveals that men’s earnings
have actually decreased by 2% on average, while women’s earnings have
increased 25%. Several studies have investigated the factors contributing to
the stagnation and then decline in men’s earnings. A landmark study by
Levy (1988) explains how changes in the economy and the restructuring of
Family Income Composition
5
work influenced wages, jobs, and contributed to the rise in income inequality.
Economic restructuring—the shift from a manufacturing to a service sector economic base—eroded men’s ability to provide a “family wage” (Levy,
1988; Smith & Tickamyer, 2011). Stagnant or declining men’s wages and job
loss in industries that traditionally employ men (such as manufacturing and
agriculture) put pressure on women to work for pay (Levy, 1988). Concurrent with the increased need for women’s earnings, opportunities for women
in the labor market have increased. Both the rise in educational attainment
among women and increased demand in typically female jobs in the service sector due to economic restructuring have increased opportunities for
women to secure employment in the paid labor market (Blau, Ferber, &Winkler, 2013).
Numerous studies have been published on the trends in wage inequality
and its rise over the decades, with each study building upon and fine tuning
their predecessor’s work. Danziger and Gottschalk (1995) document the rise
in earnings for all workers during the post WW II years of prosperity and
economic growth. Median earnings more than doubled from 1950 to 1970,
leading them to conclude that this was an era during which “a rising tide
lifted all boats.” In the 1970s, median earnings stagnated and then declined
throughout the 1980s (Levy & Murname, 1992). However, the declines in
earnings were not equally distributed, and earnings inequality rose substantially in the 1980s, and continued well into the 1990s (Bernstein & Mishel,
1997). The rise in wage inequality over the 1980s has been attributed to the
growth in education differentials, such that wages of highly educated men
rose and wages of men with low education levels stagnated and decreased
(Bernstein & Mishel, 1997). Yet, in the early 1990s there were signs that even
the gains from education were eroding, and by 1996 only the top earners
(those at the ninth decile) retained wage growth since the 1970s (Morris &
Western, 1999). Autor, Katz, and Kearney (2008) find a continuous rise in
men’s wages among those at the top of the male earnings distribution from
1979 to 2005. They further document a polarization of earnings growth in the
1990s, with rapid wage growth at the upper tail of the male wage distribution,
but wage stagnation at the middle and bottom of the wage distribution. Wage
growth in the upper tail continued to outpace wage growth at the middle
and bottom during the Great Recession, marking continued wage inequality
(DeNavas-Walt, Proctor, & Smith, 2012).
An important finding was that these trends varied by gender (Blau et al.,
1986; Blau, Ferber, & Winkler, 2013). Women’s wages grew between 1970 and
1996, with the largest gains among those at the top of the women’s earnings
distribution, which masked the overall declining trend in earnings for all men
(Morris & Western, 1999). Yet, wage inequality among women has grown
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EMERGING TRENDS IN THE SOCIAL AND BEHAVIORAL SCIENCES
but to a lesser extent than among men, and the gender wage gap, although
diminished, remains (Blau, 1998).
Demographic shifts in family formation have also fueled the widening gap
in family income among married couples with a wife in the labor force and
other family types. Economists use the term, “assortative positive mating”
to describe the phenomenon of people with similar qualities and characteristics marrying each other (Becker, 1981). Early studies of marital homogamy
(Becker, 1981; Lichter, 1990; Oppenheimer, 1988; Sweet & Bumpass, 1987)
found that couples tend to sort into marriage on the basis of similar age,
religion, race, class, physical attractiveness, and education. More recently,
research has added to our understanding of marital homogamy with the finding that increasingly couples marry on the basis of earnings (Cancian & Reed,
1999). Research documents that the pathway to marriage has become more
select, with marriage rates higher among those with higher education levels
(Edin & Kefalas, 2005). That highly educated and high-earning women and
men are more likely to marry, and typically marry each other now more than
in the past, means that low-earning women and men are increasingly concentrated in single-headed families (or cohabiting couples)—this translates
into larger gaps in family income by family type.
Furthermore, research finds that dual-earner married couples are more
likely to delay childbearing, have lower fertility, and are more likely to
remain childless, attributes typically related to higher family earnings
(Hertz, 1988). Juhn and Murphy (1997) show that growth in earnings has
been largest among wives married to middle and high-wage men. The
changing composition of who is married with an employed wife has given
these families an edge over the other family types, widening the rift and
solidifying diverging destinies.
Karoly and Burtless (1995) showed how the intersection of changing
family structure and earnings by gender affected the distribution of income
across families and in turn contributed to rising family earnings inequality.
They found that changes in family composition, male wage inequality, and
positive assortative mating on education and earnings all contributed to the
decrease in family income for families at the bottom of the earnings scale,
and the increase for families at the top of the earnings scale. At the lower
family income levels, the increase in single parents with low human capital
attributes (low education and income levels) coupled with falling wages for
men with low earnings means that families at the bottom either rely on one
low-wage earner (typically the mother), or if they have a male earner, these
male earnings have deteriorated over time. At the higher income levels in
contrast, families are increasingly made up of married couples with two
earners. They maintain these high incomes because the wages of men at
the top have grown in real terms and educational and income homogamy
Family Income Composition
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means that highly educated, high-earning women typically marry highly
educated, high-earning men. The end result is that employed, high-earning
women are married to employed, high-earning men, creating a perfect storm
for family income growth among this group and the development of a large
gap in family income as shown in Figure 1.
AREAS OF CUTTING-EDGE RESEARCH
The issues described—women’s and wives increased labor force attachment,
trends in differential earnings growth and wage inequality for men and
women, and shifts in family formation—have spawned entire bodies of
research in their own right, extending our understanding of the components
of family income composition. Several intriguing avenues of research have
emerged from the inquiry resulting in cutting-edge research. Much of this
new research is intersectional, cutting across disciplinary boundaries.
One such avenue of research stems from the shift in earnings by gender,
resulting in an increased reliance on women as breadwinners and the growing importance of wives’ income to the economic survival of families. The
rise in women’s employment and their increased earnings power has led
to new forms of family breadwinning, challenging the traditional models of
gendered breadwinning patterns and the gendered division of labor in both
paid market work and in unpaid housework. Some families have witnessed a
blurring of gender roles and a softening of gender norms, challenging power
relations. As a result, adults in households with children are more likely to
juggle paid work and family responsibilities than they were in the 1950s or
1960s, when more women were out of the labor force and men were the primary or sole economic provider.
The media tends to depict women who earn more than their husbands
as high-earning, highly educated women who work long hours (Tyre &
McGinn, 2003), yet Winkler (1998) documents that primary provider wives
are more common among low-income couples than among high-income
couples. When the husbands’ income was in the lowest quintile, 55% of
wives outearned their husbands; but, only 2% of wives outearned their husbands when the husbands’ income was in the highest quintile. Furthermore,
research using longitudinal data documents that a diminishing percentage
of wives were persistently primary providers year after year (Winkler,
McBride, & Andrews, 2005; Winslow-Bowe, 2006), suggesting that wives’
economic advantage is more of a transitory or temporary phenomenon,
coming into play often as a result of economic vulnerability on the part of
their husbands rather than due to their own earning prowess. However,
a new area of research—stay-at-home fatherhood—challenges the field to
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EMERGING TRENDS IN THE SOCIAL AND BEHAVIORAL SCIENCES
consider new areas of inquiry such as research on redefining fatherhood and
the blurring of gender roles.
The rise in wives’ earnings relative to their husbands has resulted in an
emerging and growing body of research examining the implications of wives’
greater earning power relative to their husbands with respect to bargaining
within marriage (Ferree, 1990), marital power (Tichenor, 2005), marital quality (Rogers, 1999; Vannoy & Philliber, 1992), marital disruptions (Heckert,
Nowak, & Snyder, 1998), and housework (Bittman, England, Sayer, Folbre, &
Matheson, 2003; Brines, 1994). Furthermore, new research suggests an acceleration effect of recessions on wives’ share of total family earnings (Smith,
2012), increased labor force activity among wives when husbands stop working during recession (Mattingly & Smith, 2010), and research on job flexibility
has burgeoned as employers and families struggle to find a balance between
work and family. Declining labor market fortunes of men coupled with gains
in employment and earnings of women point to the increasing reliance on
wives’ income to the economic survival of families (Teachman, Tedrow, &
Crowder, 2000).
Another avenue of research considers the role of family structure in the rise
in family income inequality. Scholars hypothesize that changes in the family, specifically the growth of single-mother families, contribute to the rise in
income inequality because single mothers typically work fewer hours and
earn less than dual-earner married couple families, and families with men
as the primary breadwinners (McLanahan & Casper, 1995). Studies vary in
their estimates, but generally find that the increases in single motherhood
accounts for between 11% and 41% of the rise in family income inequality
(see McLanahan and Percheski 2008 for a review). Similarly, studies show
that family income inequality would have been higher if women’s employment rates and earnings had not risen (Cancian & Reed, 1999; Daly & Valletta,
2006).
Finally, there is a growing body of research on within group wage inequality. For example, research on wage inequality among women has focused on
wage differences between mothers and childless women (Budig & England,
2001; Glauber, 2007), among racial groups (Browne & Askew, 2005; Pettit &
Ewert, 2009), and the spatial wage gap (Smith & Glauber, 2013).
KEY ISSUES FOR FUTURE RESEARCH
Several important questions emerge from the research on family earnings
composition for future research. First, we have good quality, cross-sectional
annual data spanning several decades which allows for researchers to examine long-term trends in these topics. For example, the Current Population
Family Income Composition
9
Survey has similarly worded questions dating back to the late 1940s, allowing for analyses of long-term trends. Although examined extensively, these
data can be used to push our understanding of how wage and family inequality has changed over time, and to what extent wives’ share of total family
earnings contributed to this change. In addition, research using longitudinal data should be exploited to examine the dynamics of changes in men’s
and women’s earnings on family income composition, over time and during
periods of economic recession and expansion.
Second, the age structure of our population is changing. As the baby
boomers age so too does our population, raising questions regarding the
composition of family income in older age. Some Americans are seeking
early retirement, while others remain gainfully employed well into their
1970s (and even 1980s). As the baby boomers enter retirement years,
research could be done to better our understanding of how changes in the
age composition of our population influence family income composition,
wage and income inequality, and breadwinning patterns. In addition,
intergenerational support from grandparents to their adult children can
be substantial and improve the well-being of receiving families (Hogan,
Eggebeen, & Clogg, 1993). Intergenerational support takes many forms,
ranging from money, child care, housing, food, and financial support for
education to emotional support, housework, advice, and companionship.
Although these transfers may not be considered income, understanding how
this support flows is an important part of the equation when considering
family economic well-being.
Third, gender clearly is a critical component in the understanding of how
and why the composition of family earnings has changed. Unmasking how
the labor market fortunes of men and women varied over the decades was
key to gaining a true perspective on the forces at work in the overall change.
Critical also was uncovering the intersections of family structure and family
income inequality. More intersectional research is needed to fully understand
the dynamics involved in the composition of family income, and to uncover
the underlying factors of family income inequality.
Finally, we must be mindful that structural changes in the economy have
had an effect on men’s and women’s labor force participation and wages,
oftentimes in opposite directions. For example, new research by Hollister
and Smith (2014) find that increases in married mothers’ job tenure have
masked the overall decreases in job tenure in the larger economy, as evidenced by declines in job tenure among men, and single women without
children. The extent to which job tenure, the bifurcation of the job market,
economic restructuring, and other structural changes have a negative effect
on men’s wages should continue to be considered in future research on family
income inequality.
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EMERGING TRENDS IN THE SOCIAL AND BEHAVIORAL SCIENCES
While some families are doing quite well, the economic health of other families is questionable at best, leading Sara McLanahan (2004) to describe a
phenomenon of “diverging destinies” for children based on the education
level and resources available to the mother. Extending this notion further, the
trajectories in family well-being depicted in Figure 1 portray diverging destinies for families, with the well-being of children and families differentiated
depending on family structure, mother’s employment, and men’s standing
in the labor force, marking an erosion of shared social experience as very
different life pathways, experiences and opportunities emerge.
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black women’s relative wages since 1980. Demography, 46, 469–492.
Rexroat, C. (1992). Changes in the employment continuity of succeeding cohorts of
young women. Work and Occupations, 19, 18–34.
Rogers, S. (1999). Wives’ income and marital quality: Are there reciprocal effects?
Journal of Marriage and the Family, 61, 123–132.
Rosenfeld, R. A. (1996). Women’s work histories. Population and Development Review,
22, 199–222.
Schwartz, C. (2010). Earnings inequality and the changing association between
spouses’ earnings. American Journal of Sociology, 115(5), 1525–1557.
Smith, K. (2012). Recessions Accelerate Trend of Wives as Breadwinners. Issue Brief
No. 56. Durham, NH: Carsey Institute.
Smith, K., & Glauber, R. (2013). Exploring the spatial wage penalty for women: Does
it matter where you live? Social Science Research, 42(5), 1390–1401. First published
online 8 April 2013.
Smith, K., & Tickamyer, A. (Eds.) (2011). Economic restructuring and family well-being
in rural America. Penn State University Press: University Park.
Sweet, J. A., & Bumpass, L. L. (1987). American families and households. New York, NY:
Russell Sage Foundation.
Teachman, J., Tedrow, L., & Crowder, K. (2000). The changing demography of America’s families. Journal of Marriage and the Family, 62, 1234–1246.
Tichenor, V. (2005). Maintaining men’s dominance: Negotiating identity and power
when she earns more. Sex Roles, 53, 191–205.
Tyre, P. & McGinn, D. (2003). She works, he doesn’t. Newsweek, p. 44.
U.S. Census Bureau (2012a). Current population survey, annual social and economic
supplements. Table F-7. Type of Family, All Races by Median and Mean Income:
1947 to 2011.
U.S. Census Bureau (2012b). Current population survey, annual social and economic
supplements. Table P-13AR. Marital Status—All Races 18 Years Old and Over by
Median Income and Sex: 1974 to 2012.
Family Income Composition
13
Vannoy, D., & Philliber, W. (1992). Wife’s employment and quality of marriage. Journal of Marriage and the Family, 54, 387–398.
Winkler, A. E. (1998). Earnings of husbands and wives in dual-earner families.
Monthly Labor Review, 121, 42–48.
Winkler, A. E., McBride, T., & Andrews, C. (2005). Wives who outearn their husbands: A transitory or persistent phenomenon for couples? Demography, 42(3),
523–535.
Winslow-Bowe, S. (2006). Persistence of wives’ income advantage. Journal of Marriage
and the Family, 68(4), 824–842.
FURTHER READING
Blau, F. D., Ferber, M. A., & Winkler, A. E. (2013). The Economics of women, men, and
work (7th ed.). Upper Saddle River, NJ: Prentice Hall.
Casper, L. M., & Bianchi, S. M. (2002). Continuity and change in the American family.
Thousand Oaks, CA: Sage.
Danziger, S., & Gottschalk, P. (1995). America unequal. Cambridge, MA: Harvard University Press.
Karoly, L. A., & Burtless, G. (1995). Demographic change, rising earnings inequality,
and the distribution of personal well-being, 1959-1989. Demography, 32(3), 379–405.
Levy, F. (1998). The new dollars and dreams: American incomes and economic change. New
York, NY: Russell Sage Foundation.
McLanahan, S., & Percheski, C. (2008). Family structure and the reproduction of
inequalities. American Review of Sociology, 34, 257–276.
KRISTIN E. SMITH SHORT BIOGRAPHY
Kristin E. Smith is a research associate professor of Sociology and family
demographer at the Carsey School of Public Policy at the University of New
Hampshire. Her research is focused in the areas of family demography, work
and family, economic sociology, gender, inequality and public policy. She
is co-editor of Economic Restructuring and Family Wellbeing in Rural America.
Her research has been published in academic journals, including American
Sociological Review, Demography, Monthly Labor Review, Social Science Research,
Family Relations and has also been reported in the New York Times, the Los
Angeles Times, the Washington Post, the Boston Globe, and numerous online
and local media outlets, and she has appeared on National Public Radio.
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-
Family Income Composition
KRISTIN E. SMITH
Abstract
Family income has increased overall in the United States since the 1950s, but
increased prosperity has not been distributed evenly, with family economic
well-being increasing more for some families than others. The end result has been
increased family income inequality. Married couple families with a wife in the labor
force have seen the largest gains over the decades. In general, families experienced
increased prosperity over the 1950s and 1960s, a time when earnings increased for
men and women. Starting in the early 1970s, however, the gap between families
with a wife in the labor force and other families expanded markedly, as men’s wage
inequality grew and women’s earnings continued to rise. This resulted in a flat
trend line for families dependent only on men’s earnings. Meanwhile, female-led
families have seen only modest increases in family income. This uneven growth in
family income has its roots in demographic changes in the family, the focus of this
essay. Markedly, the rise in women’s employment and earnings, the rise in men’s
wage inequality, and shifts in family structure and increased marital homogamy on
earnings all contributed to the shifts in family income composition.
INTRODUCTION
Since the 1940s, American households and families have experienced
increased prosperity. Median family earnings have risen dramatically from
$27,255 in 1947 to $62,241 in 2012 (in constant 2012 dollars) (US Census
Bureau, 2012a). Household income and wealth have also risen. But has the
rising tide lifted all Americans, regardless of family type, or is there variation
by family composition, such that some have benefitted to a larger extent
than others? This essay examines the role of demographic shifts in the family
and how they contributed to a change in family earnings composition.
American families have higher earnings overall since the 1950s, yet
increased prosperity has not been distributed evenly, leading to economic
progress for some families and stagnation for others. The end result has
been increased inequality among different household types. Winners clearly
are those with two earners contributing to the family coffers, signaling the
Emerging Trends in the Social and Behavioral Sciences. Edited by Robert Scott and Stephen Kosslyn.
© 2015 John Wiley & Sons, Inc. ISBN 978-1-118-90077-2.
1
2
EMERGING TRENDS IN THE SOCIAL AND BEHAVIORAL SCIENCES
Median family income by family type,
1949–2012 (in 2011 dollars)
Married couple, wife in labor force
Married couple, wife not in labor force
Male headed household
Female headed household
$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
64
19
67
19
70
19
73
19
76
19
79
19
82
19
85
19
88
19
91
19
94
19
97
20
00
20
03
20
06
20
09
20
12
61
19
58
19
55
19
52
19
19
19
49
$0
Figure 1 Median family income by family type, 1949–2012 (in 2011 dollars).
Source: US Census Bureau, Current Population Survey, Annual Social and
Economic Supplements. Table F-7. Type of Family, All Races by Median and Mean
Income: 1947 to 2012. http://www.census.gov/hhes/www/income/data/historical/
families/
rise in the importance of wives’ as breadwinners, and also highlighting
the rise in income inequality. For example, Figure 1 shows that the median
family income of married couples with a wife in the labor force1 rose
dramatically over the years. Over the 1950s and 1960s, family incomes grew
across all family types, with all experiencing increased prosperity owing to
broad-based wage growth for both men and women (Danziger & Gottschalk,
1995). However, beginning in the 1970s, the gap between families with a
wife in the labor force and other families expanded notably, as men’s wage
inequality grew and women’s earnings continued to rise. Stagnant men’s
wages at the lower and middle of the distribution of men’s earnings resulted
in the flat trend lines seen in Figure 1 for families dependent only on men’s
earnings. Meanwhile, female-led families have seen only modest increases
in family income.2
This uneven growth in family income has its roots in demographic changes
in the family, the focus of this essay, although there are other factors that
1. Given the high employment rate among married men and the low percentage of wife sole earner
families, families with a wife in the labor force are typically dual-earner couples.
2. This figure displays median family income; thus, single individuals are not included.
Family Income Composition
3
contributed to the uneven growth in income.3 The rise in women’s employment and shifting family structure—two of the most important changes in
American family life—have fueled the change in family income composition. No longer do families rely solely on the male head of household for
economic security, and no longer are families typically comprised of two
married parents. The rise of women as breadwinners within married couples
and as single mothers are undeniably marked changes from the 1950s, which
directly impact who contributes economically to the family and how the composition of earnings has shifted. The topic of family earnings composition
cuts across many disciplines, including sociology, economics, demography,
family studies, gender studies, psychology, and child development, among
others. This topic is at the heart of the well-being of women and families,
and children in particular. The rise in income inequality speaks to the growing disparities among families and their diverging destinies based on their
economic fortune. The rise in women as breadwinners is also poignant for
gender relations and gender equality.
FOUNDATIONAL RESEARCH
The American family has undergone a transformation since the 1950s. A
subject that has garnered much academic attention, classic sociological
and demographic studies by Glick (1977), Cherlin (1981), Hochchild with
Machung (1989), and Bianchi and Spain (1996) describe changes in family
structure, marriage, divorce, and women’s roles within the family and the
workplace. In the past, the typical sequence of life events for women was to
complete high school, marry and move out of the parental home, and bear
children within marriage (Glick, 1977). A minority of women worked for
pay, but often only before marriage (Bianchi and Spain, 1996).4 On the other
hand, men typically completed schooling, entered the labor force, married,
and left the parental home. Divorce and remarriage were uncommon and
few women had children outside of marriage (Cherlin, 1981).
The American family looks very different today. Women have entered
paid employment in unprecedented numbers, such that nowadays it is
more common for women to be employed than not (Casper & Bianchi,
2002). Marriage is delayed, divorce is more prevalent, and it is increasingly
common for women to bear children outside of marriage (Cherlin, 1981).
This translates into an increasing percentage of children raised by single
parents, usually the mother (McLanahan & Sandefur, 1994). Furthermore, a
3. There are other macro-economic factors contributing to the uneven growth in earnings, such as
economic restructuring, globalization, and institutional factors (refer to Morris & Western, 1999, for a full
discussion of how these factors contributed to income inequality in the United States).
4. This pattern was most common for white, middle-class women; black women have historically had
high labor force participation rates, even after the birth of a child (see, e.g., Jones, 2010).
4
EMERGING TRENDS IN THE SOCIAL AND BEHAVIORAL SCIENCES
more select group of individuals marry today than in the past, with those
with higher education and earnings marrying and bearing and raising
children within marriage, and those with low levels of education and
earnings foregoing marriage and bearing and raising children outside of
marriage (Edin & Kefalas, 2005; Schwartz, 2010).
What is behind this large rise in income among families with a wife in the
labor force and the burgeoning gap between these families and the other
family types? One factor undoubtedly is the increase in married women’s
commitment to the labor force. Cohen and Bianchi (1999) document the rise
in employed women’s work hours and the changing effects of the determinants of women’s hours spent working for pay. Specifically, they show a
diminishing effect of other family income, marital status and children, and
an increasing effect of female education level. They also find that married
women increased their average work week from 33.8 h in 1978 to 36.4 h in
1998. Longer work hours on the part of wives alone could push up the annual
family income of married couples with a wife in the labor force.
A second factor contributing to the rise in family income among married
couples with a wife in the labor force is the rise in women’s earnings,
absolutely and relative to men’s. In 2012, employed women’s median annual
earnings were $21,520, up from $9,145 in 1947 (in constant 2012 dollars)
(US Census Bureau, 2012b). In their groundbreaking study, The Economics of
Women, Men, and Work, Blau, Ferber and Winkler (1986) were among the first
to shed light on the rise in women’s earnings and thoroughly explore gender
issues regarding work and family through an economics lens. The role of
women’s increasing education and the movement of women into more
prestigious and higher paying jobs on their increased earnings has been
examined in a paper by Cotter, Hermsen, and Vanneman (2004). Furthermore, studies examining the trends in women’s labor force continuity have
found an increase in the proportion of years worked, providing evidence of
women’s increased commitment to the labor force (Rexroat, 1992; Rosenfeld,
1996). Women’s longer work hours coupled with the higher education
levels and workforce experience have collectively worked to increase their
earnings, which in turn has been a major driver in the rise in family income
among married couples with a wife in the labor force.
At the same time, men’s earnings overall have not risen to the same extent
as women’s. Over the time period from 1947 to 2012, men’s earnings rose by
69% while women’s earnings more than doubled (in constant 2012 dollars).
Yet, examining change in earnings since 1990 reveals that men’s earnings
have actually decreased by 2% on average, while women’s earnings have
increased 25%. Several studies have investigated the factors contributing to
the stagnation and then decline in men’s earnings. A landmark study by
Levy (1988) explains how changes in the economy and the restructuring of
Family Income Composition
5
work influenced wages, jobs, and contributed to the rise in income inequality.
Economic restructuring—the shift from a manufacturing to a service sector economic base—eroded men’s ability to provide a “family wage” (Levy,
1988; Smith & Tickamyer, 2011). Stagnant or declining men’s wages and job
loss in industries that traditionally employ men (such as manufacturing and
agriculture) put pressure on women to work for pay (Levy, 1988). Concurrent with the increased need for women’s earnings, opportunities for women
in the labor market have increased. Both the rise in educational attainment
among women and increased demand in typically female jobs in the service sector due to economic restructuring have increased opportunities for
women to secure employment in the paid labor market (Blau, Ferber, &Winkler, 2013).
Numerous studies have been published on the trends in wage inequality
and its rise over the decades, with each study building upon and fine tuning
their predecessor’s work. Danziger and Gottschalk (1995) document the rise
in earnings for all workers during the post WW II years of prosperity and
economic growth. Median earnings more than doubled from 1950 to 1970,
leading them to conclude that this was an era during which “a rising tide
lifted all boats.” In the 1970s, median earnings stagnated and then declined
throughout the 1980s (Levy & Murname, 1992). However, the declines in
earnings were not equally distributed, and earnings inequality rose substantially in the 1980s, and continued well into the 1990s (Bernstein & Mishel,
1997). The rise in wage inequality over the 1980s has been attributed to the
growth in education differentials, such that wages of highly educated men
rose and wages of men with low education levels stagnated and decreased
(Bernstein & Mishel, 1997). Yet, in the early 1990s there were signs that even
the gains from education were eroding, and by 1996 only the top earners
(those at the ninth decile) retained wage growth since the 1970s (Morris &
Western, 1999). Autor, Katz, and Kearney (2008) find a continuous rise in
men’s wages among those at the top of the male earnings distribution from
1979 to 2005. They further document a polarization of earnings growth in the
1990s, with rapid wage growth at the upper tail of the male wage distribution,
but wage stagnation at the middle and bottom of the wage distribution. Wage
growth in the upper tail continued to outpace wage growth at the middle
and bottom during the Great Recession, marking continued wage inequality
(DeNavas-Walt, Proctor, & Smith, 2012).
An important finding was that these trends varied by gender (Blau et al.,
1986; Blau, Ferber, & Winkler, 2013). Women’s wages grew between 1970 and
1996, with the largest gains among those at the top of the women’s earnings
distribution, which masked the overall declining trend in earnings for all men
(Morris & Western, 1999). Yet, wage inequality among women has grown
6
EMERGING TRENDS IN THE SOCIAL AND BEHAVIORAL SCIENCES
but to a lesser extent than among men, and the gender wage gap, although
diminished, remains (Blau, 1998).
Demographic shifts in family formation have also fueled the widening gap
in family income among married couples with a wife in the labor force and
other family types. Economists use the term, “assortative positive mating”
to describe the phenomenon of people with similar qualities and characteristics marrying each other (Becker, 1981). Early studies of marital homogamy
(Becker, 1981; Lichter, 1990; Oppenheimer, 1988; Sweet & Bumpass, 1987)
found that couples tend to sort into marriage on the basis of similar age,
religion, race, class, physical attractiveness, and education. More recently,
research has added to our understanding of marital homogamy with the finding that increasingly couples marry on the basis of earnings (Cancian & Reed,
1999). Research documents that the pathway to marriage has become more
select, with marriage rates higher among those with higher education levels
(Edin & Kefalas, 2005). That highly educated and high-earning women and
men are more likely to marry, and typically marry each other now more than
in the past, means that low-earning women and men are increasingly concentrated in single-headed families (or cohabiting couples)—this translates
into larger gaps in family income by family type.
Furthermore, research finds that dual-earner married couples are more
likely to delay childbearing, have lower fertility, and are more likely to
remain childless, attributes typically related to higher family earnings
(Hertz, 1988). Juhn and Murphy (1997) show that growth in earnings has
been largest among wives married to middle and high-wage men. The
changing composition of who is married with an employed wife has given
these families an edge over the other family types, widening the rift and
solidifying diverging destinies.
Karoly and Burtless (1995) showed how the intersection of changing
family structure and earnings by gender affected the distribution of income
across families and in turn contributed to rising family earnings inequality.
They found that changes in family composition, male wage inequality, and
positive assortative mating on education and earnings all contributed to the
decrease in family income for families at the bottom of the earnings scale,
and the increase for families at the top of the earnings scale. At the lower
family income levels, the increase in single parents with low human capital
attributes (low education and income levels) coupled with falling wages for
men with low earnings means that families at the bottom either rely on one
low-wage earner (typically the mother), or if they have a male earner, these
male earnings have deteriorated over time. At the higher income levels in
contrast, families are increasingly made up of married couples with two
earners. They maintain these high incomes because the wages of men at
the top have grown in real terms and educational and income homogamy
Family Income Composition
7
means that highly educated, high-earning women typically marry highly
educated, high-earning men. The end result is that employed, high-earning
women are married to employed, high-earning men, creating a perfect storm
for family income growth among this group and the development of a large
gap in family income as shown in Figure 1.
AREAS OF CUTTING-EDGE RESEARCH
The issues described—women’s and wives increased labor force attachment,
trends in differential earnings growth and wage inequality for men and
women, and shifts in family formation—have spawned entire bodies of
research in their own right, extending our understanding of the components
of family income composition. Several intriguing avenues of research have
emerged from the inquiry resulting in cutting-edge research. Much of this
new research is intersectional, cutting across disciplinary boundaries.
One such avenue of research stems from the shift in earnings by gender,
resulting in an increased reliance on women as breadwinners and the growing importance of wives’ income to the economic survival of families. The
rise in women’s employment and their increased earnings power has led
to new forms of family breadwinning, challenging the traditional models of
gendered breadwinning patterns and the gendered division of labor in both
paid market work and in unpaid housework. Some families have witnessed a
blurring of gender roles and a softening of gender norms, challenging power
relations. As a result, adults in households with children are more likely to
juggle paid work and family responsibilities than they were in the 1950s or
1960s, when more women were out of the labor force and men were the primary or sole economic provider.
The media tends to depict women who earn more than their husbands
as high-earning, highly educated women who work long hours (Tyre &
McGinn, 2003), yet Winkler (1998) documents that primary provider wives
are more common among low-income couples than among high-income
couples. When the husbands’ income was in the lowest quintile, 55% of
wives outearned their husbands; but, only 2% of wives outearned their husbands when the husbands’ income was in the highest quintile. Furthermore,
research using longitudinal data documents that a diminishing percentage
of wives were persistently primary providers year after year (Winkler,
McBride, & Andrews, 2005; Winslow-Bowe, 2006), suggesting that wives’
economic advantage is more of a transitory or temporary phenomenon,
coming into play often as a result of economic vulnerability on the part of
their husbands rather than due to their own earning prowess. However,
a new area of research—stay-at-home fatherhood—challenges the field to
8
EMERGING TRENDS IN THE SOCIAL AND BEHAVIORAL SCIENCES
consider new areas of inquiry such as research on redefining fatherhood and
the blurring of gender roles.
The rise in wives’ earnings relative to their husbands has resulted in an
emerging and growing body of research examining the implications of wives’
greater earning power relative to their husbands with respect to bargaining
within marriage (Ferree, 1990), marital power (Tichenor, 2005), marital quality (Rogers, 1999; Vannoy & Philliber, 1992), marital disruptions (Heckert,
Nowak, & Snyder, 1998), and housework (Bittman, England, Sayer, Folbre, &
Matheson, 2003; Brines, 1994). Furthermore, new research suggests an acceleration effect of recessions on wives’ share of total family earnings (Smith,
2012), increased labor force activity among wives when husbands stop working during recession (Mattingly & Smith, 2010), and research on job flexibility
has burgeoned as employers and families struggle to find a balance between
work and family. Declining labor market fortunes of men coupled with gains
in employment and earnings of women point to the increasing reliance on
wives’ income to the economic survival of families (Teachman, Tedrow, &
Crowder, 2000).
Another avenue of research considers the role of family structure in the rise
in family income inequality. Scholars hypothesize that changes in the family, specifically the growth of single-mother families, contribute to the rise in
income inequality because single mothers typically work fewer hours and
earn less than dual-earner married couple families, and families with men
as the primary breadwinners (McLanahan & Casper, 1995). Studies vary in
their estimates, but generally find that the increases in single motherhood
accounts for between 11% and 41% of the rise in family income inequality
(see McLanahan and Percheski 2008 for a review). Similarly, studies show
that family income inequality would have been higher if women’s employment rates and earnings had not risen (Cancian & Reed, 1999; Daly & Valletta,
2006).
Finally, there is a growing body of research on within group wage inequality. For example, research on wage inequality among women has focused on
wage differences between mothers and childless women (Budig & England,
2001; Glauber, 2007), among racial groups (Browne & Askew, 2005; Pettit &
Ewert, 2009), and the spatial wage gap (Smith & Glauber, 2013).
KEY ISSUES FOR FUTURE RESEARCH
Several important questions emerge from the research on family earnings
composition for future research. First, we have good quality, cross-sectional
annual data spanning several decades which allows for researchers to examine long-term trends in these topics. For example, the Current Population
Family Income Composition
9
Survey has similarly worded questions dating back to the late 1940s, allowing for analyses of long-term trends. Although examined extensively, these
data can be used to push our understanding of how wage and family inequality has changed over time, and to what extent wives’ share of total family
earnings contributed to this change. In addition, research using longitudinal data should be exploited to examine the dynamics of changes in men’s
and women’s earnings on family income composition, over time and during
periods of economic recession and expansion.
Second, the age structure of our population is changing. As the baby
boomers age so too does our population, raising questions regarding the
composition of family income in older age. Some Americans are seeking
early retirement, while others remain gainfully employed well into their
1970s (and even 1980s). As the baby boomers enter retirement years,
research could be done to better our understanding of how changes in the
age composition of our population influence family income composition,
wage and income inequality, and breadwinning patterns. In addition,
intergenerational support from grandparents to their adult children can
be substantial and improve the well-being of receiving families (Hogan,
Eggebeen, & Clogg, 1993). Intergenerational support takes many forms,
ranging from money, child care, housing, food, and financial support for
education to emotional support, housework, advice, and companionship.
Although these transfers may not be considered income, understanding how
this support flows is an important part of the equation when considering
family economic well-being.
Third, gender clearly is a critical component in the understanding of how
and why the composition of family earnings has changed. Unmasking how
the labor market fortunes of men and women varied over the decades was
key to gaining a true perspective on the forces at work in the overall change.
Critical also was uncovering the intersections of family structure and family
income inequality. More intersectional research is needed to fully understand
the dynamics involved in the composition of family income, and to uncover
the underlying factors of family income inequality.
Finally, we must be mindful that structural changes in the economy have
had an effect on men’s and women’s labor force participation and wages,
oftentimes in opposite directions. For example, new research by Hollister
and Smith (2014) find that increases in married mothers’ job tenure have
masked the overall decreases in job tenure in the larger economy, as evidenced by declines in job tenure among men, and single women without
children. The extent to which job tenure, the bifurcation of the job market,
economic restructuring, and other structural changes have a negative effect
on men’s wages should continue to be considered in future research on family
income inequality.
10
EMERGING TRENDS IN THE SOCIAL AND BEHAVIORAL SCIENCES
While some families are doing quite well, the economic health of other families is questionable at best, leading Sara McLanahan (2004) to describe a
phenomenon of “diverging destinies” for children based on the education
level and resources available to the mother. Extending this notion further, the
trajectories in family well-being depicted in Figure 1 portray diverging destinies for families, with the well-being of children and families differentiated
depending on family structure, mother’s employment, and men’s standing
in the labor force, marking an erosion of shared social experience as very
different life pathways, experiences and opportunities emerge.
REFERENCES
Autor, D., Katz, L., & Kearney, M. (2008). Trends in U.S. wage inequality: Revising
the revisionists. The Review of Economics and Statistics, 90(2), 300–323.
Becker, G. S. (1981). A treatise on the family. Cambridge, MA: Harvard University
Press.
Bernstein, J., & Mishel, L. (1997). Has wage inequality stopped growing? Monthly
Labor Review, 120, 3–16.
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FURTHER READING
Blau, F. D., Ferber, M. A., & Winkler, A. E. (2013). The Economics of women, men, and
work (7th ed.). Upper Saddle River, NJ: Prentice Hall.
Casper, L. M., & Bianchi, S. M. (2002). Continuity and change in the American family.
Thousand Oaks, CA: Sage.
Danziger, S., & Gottschalk, P. (1995). America unequal. Cambridge, MA: Harvard University Press.
Karoly, L. A., & Burtless, G. (1995). Demographic change, rising earnings inequality,
and the distribution of personal well-being, 1959-1989. Demography, 32(3), 379–405.
Levy, F. (1998). The new dollars and dreams: American incomes and economic change. New
York, NY: Russell Sage Foundation.
McLanahan, S., & Percheski, C. (2008). Family structure and the reproduction of
inequalities. American Review of Sociology, 34, 257–276.
KRISTIN E. SMITH SHORT BIOGRAPHY
Kristin E. Smith is a research associate professor of Sociology and family
demographer at the Carsey School of Public Policy at the University of New
Hampshire. Her research is focused in the areas of family demography, work
and family, economic sociology, gender, inequality and public policy. She
is co-editor of Economic Restructuring and Family Wellbeing in Rural America.
Her research has been published in academic journals, including American
Sociological Review, Demography, Monthly Labor Review, Social Science Research,
Family Relations and has also been reported in the New York Times, the Los
Angeles Times, the Washington Post, the Boston Globe, and numerous online
and local media outlets, and she has appeared on National Public Radio.
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