Trends in Earnings Inequality and Earnings Instability among U.S. Couples: How Important is Assortative Matching?
January 2015
Working Paper Number:
CES-15-04
Abstract
We examine changes in inequality and instability of the combined earnings of married couples over the 1980-2009 period using two U.S. panel data sets: Social Security earnings data matched to Survey of Income and Program Participation panels (SIPP-SSA) and the Panel Study of Income Dynamics. Relative to male earnings inequality, the inequality of couples' earnings is both lower in levels and rises by a smaller amount. We also find that couples' earnings instability is lower in levels compared to male earnings instability and actually declines in the SIPP-SSA data. While wives' earnings played an important role in dampening the rise in inequality and year-to-year variation in resources at the family level, we find that marital sorting and coordination of labor supply decisions at the family level played a minor role. Comparing actual couples to randomly paired simulated couples, we find very similar trends in earnings inequality and instability.
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earnings,
recession,
retirement,
salary,
ssa,
earn,
family,
household income,
fertility,
marriage,
divorced,
earnings inequality,
women earnings,
couple,
spouse
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Social Security Administration,
National Bureau of Economic Research,
Stern School of Business,
Survey of Income and Program Participation,
Social Security,
Research Data Center,
PSID,
Master Earnings File
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