Presentation on theme: "Dual Earner Couples and Inequality in Earnings: Norway 1974-2004 by Gunn Elisabeth Birkelund Arne Mastekaasa University of Oslo."— Presentation transcript:
Dual Earner Couples and Inequality in Earnings: Norway 1974-2004 by Gunn Elisabeth Birkelund Arne Mastekaasa University of Oslo
Rising economic inequality Many western countries have seen rising economic inequalities: The growth in market income Ginis between 1980 and 2000 ranges from a 6% to 7% increase in Denmark and Italy to a 20%-plus jump in the United Kingdom, the United States, and most surprising, Sweden. (Esping-Andersen 2007:641)
Q: Have changes over time in married womens labour force participation had an equalizing effect on household inequalities in earnings? Empirical studies has produced divergent results: Esping-Andersen (2007) found equalizing effect of wifes earnings in Denmark, Sweden and the US, and increasing inequality effect in the UK, Germany, Italy, France and Spain.
We will describe trends in inequalities in earnings among households in Norway for the period 1974 to 2004. For the period 1993-2004 we will look at both earnings and income, and include both married couples and cohabiting couples (with (a) common child(ren)).
Inequality in Norway A Scandinavian welfare state, with smaller socio-economic differences than most Western countries due to a compressed income distribution (Atkinsen et al. 1995) Partly due to oil and gas exploitation from the North sea: Norway among the top countries (highest GNP) in the world (OECD). Yet attituinal studies show egalitarian values still strong in the population (Aalberg 2003)
Women and work in Norway Married womens labour force participation was low after WWII, and started to grow in the 1970s. Today, 89% of all men and 82% of all women between 25-54 are gainfully employed (Statistics Norway). About 40% women work part-time (less than 35 hours per week).
Inequality in household earnings The inequality in households earnings is a function of the inequality in each spouses earnings taken separately, and of the assiciation between the two spouses earnings; the Coefficient of Variation: Where subscript f refers to household, h to husband and w to wife. CV is the coefficient of variation, the correlation of husbands and wifes earnings, and S is the (population) mean share of husbands or wifes earnings, respectively of total household earnings.
Marginal effects Thus, the impact of wifes earnings on household earnings inequality depends on three factors: (1)The degree of inequality in wifes earnings (2)The share of wifes earnings of household earnings (3) The correlation of wifes and husbands earnings i.e., the direction and shape of wifes earnings impact is complicated and difficult to predict
Data 1974-2004: Annual Labour Force Surveys with register data on earnings 1993-2004: Register data on complete birth cohorts 1955-1985 ( Educational careers) Samples: LFS: All married couples with a husband 26-65 years of age Samples: Educational careers: Married and cohabiting couples with a husband 35- 39 years of age.
Measurements Pretax-pretransfer income inequalities; i.e. market inequalities (but we do not have info on capital income) This measurement will show larger income inequalities than a post-tax-posttransfer income measurement would. CVs are sensitive to extreme values, thus we have excluded households with incomes in the top 0.5 (LFS) or 0.1 ( Educ career data )
Conclusions 1974-2004 Explorative and descriptive study Only aggregate trends: Wifes earnings have had an equalizing effect on household inequalities in earnings from ca 1985-2000 CVs for wifes earnings declined from 1974-2004 (0 earnings) Husband-wifes earnings correlations increased ca 1977- 1994, then trendles fluxtuations Wifes share of household earnings gradually increased in whole period 1974-2004
1994-2004 Small – and mostly insignificant – changes in correlations (Pearsons r) between partners education and work hours. Increasing association over time in partners earnings (yet still low) Stable patterns of inequality in earnings (CVs), fluctuations in CVs for husbands income (more inequality) Small differences between cohabitors and married couples.