Women’s earnings and household inequality in OECD countries, 1973–2013

Abstract

This article shows that women’s rising earnings contributed to reducing inequality in household earnings, with respect to couples. We use data from the Luxembourg Income Study (LIS) on 1,148,762 coupled households, covering 18 OECD countries and the period from 1973 to 2013. In this period, women’s share of household earnings grew, spouses’ earnings became more strongly and positively correlated in various countries, and inequality in women’s earnings was reduced. Inequality in household earnings increased due to the rising correlation between spouses’ earnings, but was reduced more by the decline of inequality in women’s earnings. Had women’s earnings remained unchanged since the 1970s and 1980s, inequality in household earnings would have been higher around 2010 in all observed OECD countries. Household inequality was reduced least by trends in women’s earnings in countries with a long history of high female labor-force participation, such as Finland (3% reduction) and Sweden (5%), and most in countries that observed a stronger increase in female labor-force participation in recent decades such as Spain (31%) and the Netherlands (41%). As more countries are reaching a plateau in the growth of women’s employment and earnings, the potential for further stimulating women’s employment and earnings to counter both women’s and household inequality seems to be increasingly limited.