Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282640 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16513
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Using CPS data for 1976 to 2022 we explore how wage inequality has evolved for married couples with both spouses working full time full year, and its impact on household income inequality. We also investigate how marriage sorting patterns have changed over this period. To determine the factors driving income inequality we estimate a model explaining the joint distribution of wages which accounts for the spouses' employment decisions. We find that income inequality has increased for these households and increased assortative matching of wages has exacerbated the inequality resulting from individual wage growth. We find that positive sorting partially reflects the correlation across unobservables influencing both members' of the marriage wages. We decompose the changes in sorting patterns over the 47 years comprising our sample into structural, composition and selection effects and find that the increase in positive sorting primarily reflects the increased skill premia for both observed and unobserved characteristics.
Subjects: 
marital sorting
inequality
selection
JEL: 
C30
J12
J31
Document Type: 
Working Paper

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