The Two-Income Trap - Elizabeth Warren [111]
Chapter 3
1 Rosalind C. Barnett and Caryl Rivers, She Works/He Works: How Two-Income Families Are Happier, Healthier, and Better-Off (San Francisco: HarperSanFrancisco, 1996), pp. 2, 5.
2 In 1973, the median income for a woman who worked full-time, year-round was $6,488, or $21,913 adjusted for inflation to 2000 dollars. U.S. Census Bureau, Table P-36, Full-Time, Year-Round Workers (All Races) by Median Income and Sex: 1955 to 2000. Available at http://landview.census.gov/hhes/income/histinc/p36.html [1/10/2003]. A longtime stay-at-home wife with fewer skills might have earned somewhat less than the median income on entering the workforce. Such differences, however, should be relatively modest. In the late 1970s, for example, women in their early twenties (who were presumably less experienced than average) earned only 12 percent less than the median income for all working women. In addition, middle-class women generally had higher levels of education than many lower-income working mothers. U.S. Department of Labor, “Highlights of Women’s Earnings in 2000,” August 2001, Table 13.
3 Unemployment Insurance Fact Sheet, Department of Labor. Available at http://workforcesecurity.doleta.gov/unemploy/uifactsheet.asp.
4 There have been conflicting studies of what sociologists call “the added worker effect,” that is, the magnitude and direction of changes in workforce participation of wives of unemployed men. For example, some researchers have examined whether a wife’s labor force participation increases in the same year of or in the year immediately following the husband’s unemployment, and found no significant effect. See, for example, Tim Maloney, “Unobserved Variables and the Elusive Added Worker Effect,” Economica 58 (May 1991): 173-187; see also W. Jean Yeung and Sandra L. Hofferth, “Family Adaptations to Income and Job Loss in the U.S.,” Journal of Family and Economic Issues 19 (Fall 1998): 255-283. However, more recent research has shown that wives’ entrance into the workforce is gradual, beginning one or more years before a husband’s job loss and continuing for multiple years after the job loss. When this is taken into account, a significant “added worker effect” has been documented. See Melvin Stephens Jr., “Worker Displacement and the Added Worker Effect,” National Bureau of Economic Research, Working Paper 8260 (April 2001).
5 See Stephens, “Worker Displacement and the Added Worker Effect.” Stephens found that the greater the number of children under age six, the less likely the wife was to increase her participation in the workforce. See also Jonathan Gruber and Julie Berry Cullen, “Spousal Labor Supply as Insurance: Does Unemployment Insurance Crowd Out the Added Worker Effect?” National Bureau of Economic Research, Working Paper 5608 (June 1996).
6 Black women living in areas of high unemployment are less likely to increase their participation in the workforce, presumably because of the difficulty in finding a job. See Yeung and Hofferth, “Family Adaptations to Income and Job Loss.”
7 A wife is significantly more likely to increase her hours in the workforce if her husband suffers a large wage loss than if he finds a new job with similar or higher wages. See Stephens, “Worker Displacement and the Added Worker Effect.” As the duration of a husband’s unemployment increased, the probability that his wife would enter the workforce nearly doubled. Craig B. Little, “Technical-Professional Unemployment: Middle-Class Adaptability to Personal Crisis,” Sociological Quarterly 17 (Spring 1976): 262-274; interviews were conducted with 100 unemployed male technical-professional workers during the aerospace-defense-electronics recession of early 1972. See also Gruber and Cullen, “Spousal Labor Supply as Insurance,” in which the authors argue that unemployment insurance tends to crowd out spousal labor supply: “Our estimates imply that in the absence of