Family Well-being Grows Faster When Wives Earn More Than Husbands, New Study Finds
ATLANTA—Economists at Georgia State University have discovered that family welfare — an economic measure of satisfaction, well-being or “happiness” — grew faster during the last two decades in U.S. households where wives earned higher wages than their husbands, outpacing its growth in families where the husband earned more or where husband and wife earned the same wages.
This rise in family welfare was particularly true during the last decade, 2003-2012, despite data suggesting many families in 2012 still found the idea of wives earning more than their husbands distasteful.
Julie Hotchkiss and Robert Moore, with co-authors Fernando Rios-Avila and Melissa Trussell, used data from the U.S. Bureau of Labor Statistics’ Current Population Survey to assess the impact of economic changes in the 1990s and 2000s on the welfare of married households. The research, recently published by the Review of Economics on the Household, also takes into account the relative earnings of husbands and wives.
“Our research examines the trade-off between pay and leisure time. When wages go up, people make adjustments to their leisure time. Many decide they don’t need to work as many hours. Others decide to work more,” said Moore. “How much time you spend away from work, and how much you’re paid, contribute to your happiness.”
During the 1990s, both families with higher paid wives and those with higher paid husbands showed greater welfare gains than those in which the spouses both earned roughly the same hourly wage. These families gained, on average, half as much in family welfare as the two other family types.
During the 2000s, the decade of the Great Recession, families in which the wife was the higher wage earner gained the greatest amount of family welfare, followed by families in which husbands and wives earned similar wages. Both types of families registered significant welfare gains over families in which the husband was the higher wage earner.
“This finding was not surprising, as the 2007-2009 recession was known for its disproportionate impact on industries in which men are over-represented,” said Hotchkiss. “The smaller welfare gains among these families could derive from the husband not realizing his full potential in the labor market or from suffering larger wage declines than his wife.”
The share of families in which the wife earns a higher wage than her husband has grown consistently over time, from 16 percent in 1994 to 18 percent in 2003 and 21 percent in 2012.
“We also see in our data a phenomenon identified by others,” said Moore. “There’s a steep drop in the share of families right at the point where wives contribute more than half of the family’s earned income. This ‘cliff’ shows there’s still a strong social preference for husband/wife pairs in which husbands earn more than their wives
The new study was a follow-up to Hotchkiss and Moore’s 1997 analysis of two-earner families, “Running hard and falling behind,” which found dual-income families in the decade ending in 1993 worse off than those a decade earlier in terms of well-being.
“There were many more traditional households then,” said Moore, “but in many families the wife had to work so the family could keep up financially. We did this newer research to see how families have fared since that study.”