Determinants of household earnings inequality: The role of labour market trends and changing household structure

Arbeitspapier

This article assesses various underlying driving factors for the evolution of household earnings inequality or 23 OECD countries from the mid-1980s to the mid-2000s. There are a number of factors at play. Some are related to labour market trends - increasing dispersion of individual wages and changes in men's and women's employment rates. Others relate to shifts in household structures and family formation - more single-headed households and increased earnings correlation among partners in couples. The contribution of each of these factors is estimated using a semi parametric decomposition technique. The results reveal that marital sorting and household structure changes contributed, albeit moderately, to increasing household earnings inequality, while rising women's employment exerted a sizable equalising effect. However, changes in labour market factors, in particular increases in men's earnings disparities, were identified as the main driver of household earnings inequality, contributing between one-third and one-half to the overall increase in most countries. Sensitivity analysis applying a reversed-order decomposition suggests that these results are robust.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: LIS Working Paper Series ; No. 591

Classification and Topics

• Classification: Wirtschaft ; Personal Income, Wealth, and Their Distributions ; Marriage; Marital Dissolution; Family Structure; Domestic Abuse ; Time Allocation and Labor Supply ; Welfare, Well-Being, and Poverty: General
• Subject: earnings inequality ; assortative mating ; female labour supply ; decomposition ; Haushaltseinkommen ; Alleinerziehende ; Weibliche Arbeitskräfte ; Männliche Arbeitskräfte ; OECD-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chen, Wen-Hao ; Förster, Michael ; Llena-Nozal, Ana
• Event: Veröffentlichung
• (who): Luxembourg Income Study (LIS)
• (where): Luxembourg
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/95597
• Last update: 10.03.2025, 11:44 AM CET