The most incisive guide to issues facing the American family today . . . An invaluable resource for anyone wishing to stay on the cutting edge of research on family trends.

-W. Bradford Wilcox
Associate Professor of Sociology, University of Virginia 

The 1950s Are Looking Better

Bryce J. Christensen and Robert W. Patterson

The evidence continues to show that even before the current recession, income inequality and insecurity have risen during the same time that the United States has experienced increased rates of divorce and single motherhood, the loss of the family wage, and increased numbers of families with two college-educated wage earners. Three studies representing different academic disciplines quantify the altered economic landscape.

From the economic guild comes a study by Mark W. Frank of Sam Houston State University that reveals, using panel data from 1945 to 2004, how inequality measures rose substantially in America during the 1980s and 1990s. Confirming previous studies that aggregate trends in inequality, Frank uses state-level income data from the Internal Revenue Service to document a “prolonged period of stability” from World War Two to 1980. During those years, the yearly trend in the share of income earned by the top 10 percent in the vast majority of the 48 continental states, while reaching a low of 28 percent in 1953, remained about 30 to 31 percent. But in the early 1980s, that share started to rise, reaching 43 percent in 2000.

Frank’s study also reveals a “long-run” positive relationship between the income inequality he charts and economic growth, growth he claims is “driven primarily by income concentration within the upper end of the income distribution.” The economist doesn’t mention this, but the increase of the percentage of U.S. married households with two college-educated professionals in the workforce may very well be related to the skewing of income tables.

A second study, by public policy scholars affiliated with the liberal Center for American Progress, quantifies not inequality but growing middle-class economic insecurity in the current decade. Measuring the declining ability of American households to weather a financial crisis, Christian E. Weller and Amanda M. Logan use data from the Federal Reserve’s Survey of Consumer Finances and the Bureau of Labor Statistics that reveal that the percentage of families with three months’ worth of income in financial reserves dropped from 39 percent in 2000 to 29 percent in 2007 and the percentage of families that can cover a spell of unemployment dropped from 51 percent to 44 percent during the same period. Adding data from the Agency for Healthcare Research and Quality, the researchers found that the percentage of families that can cover a medical emergency (meaning being admitted to a hospital after an emergence-room visit) fell from 44 percent to 34 percent. They note that their findings of growing insecurity predate the recession of 2008.

Unlike the first two studies, a study by sociologists at Harvard University looks specifically at the impact of economic changes on families with children. These researchers, using data from the March Current Population Survey of the U.S. Census Bureau, claim the income variance of families with children increased by two-thirds between 1975 and 2005, with the greatest boost in that variance occurring by the mid-1990s. They also find that “inequality among families with children increased more than both inequality among all families and men’s hourly wages.”

Also unlike the other studies, the Harvard team looks for explanations. The authors claim the culprit is not rising single parenthood or educational disparities but rising “within group” inequality arising from shifts in the labor market that have fostered growth in the “residual variance” in wages spread across the board. Their data, for example, clearly show similar rises in the variance of income within high-school graduates as a group and within college graduates as a group. Moreover, the data show that all three groups based on family type—single parents, married parents with two incomes, and married parents with one income—experienced increases in the variance of income. However, the data also show that the married-parent family with an at-home mother has, since the mid-1980s, consistently experienced higher rates of within-group income variance than the two-income family and, except for the years 1989–2004, the employed single mother.

This red flag about the one-income, married-parent family triggered very little commentary, even as the researchers used as the baseline for the analysis of “within-group” inequality an intact family, circa 1975, with a married father-breadwinner with a mother at home. That’s not surprising, given how the Harvard researchers overlook how the recognition of the social ideal of an earlier age tempered the economic angst that all three studies vent.

(Mark Frank, “Inequality and Growth in the United States: Evidence from a New State-Level Panel of Income Inequality Measures,” Economic Inquiry 47.1 [January 2009]: 55–68; Christian E. Weller and Amanda M. Logan, “Measuring Middle Class Economic Security,” Journal of Economic Issues 43.2 [June 2009]: 327–36; and Bruce Western et al., “Inequality among American Families with Children, 1975 to 2005,” American Sociological Review 73 [December 2008]: 903–20.)