Wives’ Relative Earnings and Labor Force Participation: Does She Exit if She Earns More?
Kristin Smith, The Carsey Institute and Sociology Department, UNH
Abstract
Using the 1996 panel of the Survey of Income and Program Participation (SIPP)
longitudinal data, I examine the relationship between wives’ earnings relative to their husbands
and labor force exits among married mothers with children under age 15. I find that primary
provider wives are more likely to exit the labor force than equal earner wives. However, an
interaction with other family income reveals that the relationship between the wife’s relative
earnings and labor force exits varies, suggesting that at very high income levels where wives are
the primary earners—where one might expect very low exit rates—exit rates are no lower,
indeed may be somewhat higher, than for primary earners with somewhat lower family income.
Introduction
On all accounts, women have made great strides in achieving equality with men since the
1950s. Women’s labor force participation and attachment have increased, more women than
men in recent cohorts have college degrees, and women’s earnings have risen relative to men’s.
Cotter, Hermsen, and Vanneman (2004) show that even though women have consistently earned
less than men since the 1960s, the gap has decreased and women’s earnings have increased
steadily since the 1960s. Men’s earnings, on the other hand, increased in the 1960s and 1970s,
but then stalled and even decreased some until the mid-1990s, when they began to increase
again.
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