Inequality and Poverty in United States: The Effects of Rising Dispersion of Men's Earnings and Changing Family Behaviour

Abstract

Using semiparametric density estimation techniques, we analyse the effect of rising dispersion of men's earnings and related changes in family behaviour on increasing inequality in the distribution of family income in the United States. For the period 1969–1989, the growing dispersion of men's earnings and changing family structure can account for most of the rise in family income inequality. By contrast, the increase in labour force participation by women offset this trend. Inequality grew at a slower rate in the 1990s than in earlier decades, largely because of stabilization in the relative earnings of men from low‐income families.