Family structure and inequality

“Income Inequality: New Trends and Research Directions” (2010):

By 2007, four in ten births were to unmarried mothers (Ventura 2009), and although the characteristics of unmarried mothers changed somewhat from the 1980s to the 1990s and 2000s, the nonmarital birth rate climbed at a fairly steady rate over this period, with the 2007 rate about 80% higher than that for 1980. This increase in the share of families headed by single mothers is hypothesized to increase inequality by increasing the number of families with very low incomes, as most single mother families work fewer hours and receive less pay than other families. Studies of the impact of increasing single motherhood on family income inequality vary in their estimates, with a range from 11% to 41%.

Notably, several studies that simultaneously consider the effects of
single motherhood (or female headship) and women’s employment on income inequality find that these trends had largely offsetting effects…
…relatively few published studies have considered how increases in homogamy have affected income inequality… both sets of authors
conclude that increasing marital homogamy
cannot account for much of the increase in income inequality in the periods that they examined… Likewise, Western
et al. (2008) find that changes in educational homogamy do not alter their estimates of changes in family income inequality… However, three recent working papers reexamine this question, and two conclude that increases in homogamy have made the distribution of family incomes substantially more unequal.

There is strong support for the hypothesis that increases in single mother families and decreases in married couple families have increased income inequality and fairly strong evidence that increased women’s employment and earnings have reduced inequality, at least through the 1990s. In contrast, there is little consensus about the impact of marital homogamy or income sorting on income inequality, suggesting that more research is needed.

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