The Causes of Wealth Inequality (3): Marital Homogamy and Declining Manufacturing & Unionization

Part of the increase [in inequality during the last decades, particularly in the U.S. and the U.K.] stems from declining manufacturing employment, part from shrinking unionization and fragmenting collective bargaining, part from heightened immigration and other aspects of globalization, and part from technological change. … [A]nother source of the rise in inequality: changes in household size and composition. Due to later marriage and more prevalent divorce, more and more households have just one adult, and hence only one potential earner. At the same time, coupling between people with similar education and thus similar earnings potential (“marital homogamy”) has increased, and the share of highly educated women who are employed continues to rise. The result of these developments is that many countries have more two-adult households with high earnings and more one- or two-adult households with low earnings than used to be the case. Lane Kenworthy (source)

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