The Right Coast

December 22, 2004
Two Earner Households
By Mike Rappaport

Do women work because families need the money or because they prefer to do so? Consider this quote excerpted by Tyler Cowan from the new book, Cowboy Capitalism:

The big increase of women in the workforce can be traced back to an increasing number of wives of well-to-do men pushing into the labor market. These women typically earn high hourly wages.

Meanwhile, among women whose husbands earned hourly wages in the bottom fifth of the distribution, the growth in labor market participation slowed down -- contrary to the overall trend.

In 1969 the annual incomes of working wives showed no correlation with the wages of their husbands. Wives of high-income earners earned above average wages, but they worked fewer hours than average. In the late 1980s, however, wives of high-income earners worked almost the same amount as wives of husbands with lower incomes.
And the increase in the hours worked of women who have husbands with high wages also leads to greater income inequality among familities.