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Reader Chris Fawcett writes in with an intriguing question: How did the women’s liberation movement affect the income gap in the U.S.?
Income inequality has been on the rise in the U.S. since the 1970s, roughly the same time that women began entering the workforce in large numbers. Considering the amount of attention the widening income gap gets these days as a source of our economic woes, it seemed like something worth posting.
Here’s how Chris sees the issue:
There are a number of ways I believe this has had a big impact (maybe the biggest impact of any single issue):
1. Women’s participation in the workplace has doubled in the past half century.
2. The divorce rate has increased steadily in the past half century.
3. It is more socially acceptable to not have children (through choice or abortion).
4. People are getting married later in life.In relation to the commonly used CBO “household” income numbers, I think these issues may have had a huge effect on the perception of the widening income gap as follows:
Women’s lib has created more dual income households among married couples while simultaneously enabling and encouraging women to be in single-earner households. This has a drastic effect on household income levels and it’s in a 2-1 trade off in household numbers. For every household that could be dual-income that either breaks up or never gets together, you replace it with two single-income households at a lower income level.
I think women’s lib was generally a good thing for society, but this seems like in unobserved consequence that most people do not understand.
For evidence, Chris points to the following data points:
1. Stats at the U.S. dept of labor show a doubling of women laborers in the last 50 years.
2. This chart showing the number of earners in the various income ranges
3. The number of divorced people quadrupled between 1970 and 1996, from 4.3 million to 18.3 million.
The most important bit from the chart is the info on how households and income correlate. For obvious reasons, married couples are disproportionately represented in the upper income brackets, whereas both single male and female earners are concentrated toward the bottom. Chris’s point is that the rise in households headed by single working women over the last three decades has artificially widened the income gap by reducing the number of dual-earning married households, and increasing the number of low-earning single households. After dividing out the major quintiles to adjust for the number of earners per household, Chris comes up with the following breakdown:
Household Income Individual income
Q1 12,500 22,894
Q2 37,500 30,562
Q3 62,500 36,960
Q4 87,500 44,014
100k-250k 175,000 87,500When you adjust to show individual incomes, the income gap is only $65k, not $160k.
Interesting exercise, but is it right?
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I just really enjoy the undercurrent of misogyny in both this original post and the comments where these pathetic attitudes are disguised as completely misguided “economic analysis”. It’s also really pathetic that the comments which call you out on the blatant misogyny are getting downvoted. Moving on to real econ blogs and deleting you suckers and your pseudo-analysis from my Google Reader kthxbye.
Hot debate. What do you think?
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Just curious, if I say that an increase in the supply of labor decreases the cost (wages) of that labor, does that make me a misogynist pig, or am I one for just discussing the subject?
Well-loved. Like or Dislike:
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No, but attributing the decrease in cost of labor (and thus a reduction in wages) to female entrants into the workforce without clear supporting evidence (maybe you’ve heard that correlation does not equal causation) would, indeed, make you kind of a misogynist.
Hot debate. What do you think?
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It’s just basic supply and demand, an increase in the supply of labor (supply curve shift right) with a constant demand will result in a decreased price of labor (wage rate).
Well-loved. Like or Dislike:
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Exactly what misogyny did you see in the article? At what point did the author point out that women are inferior to men and belong in the kitchen? Nothing remotely misogynistic was stated in the article. Your hypersensitivity to the issue is almost certainly rooted in the fact that the gender of the author is male, and you therefore perceive him as being inherently misogynistic, and therefore see malice in innocent comments like “think.” The author used “think” due to the academic habit of stating things that are not purely stated by data as a personal opinion. You chose to extrapolate it to fit your women’s studies professional victim worldview, based on nothing but emotion and false perception.
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Hey all. First of all thanks for Freakonomics for posting my idea!!
Second I wanted to make sure it was well understood that I’m very much for most of the improvements to the lives of women that the women’s liberation movement did.
Third, I guess the point I was trying to make was that the structure used to calculate the income gap is outdated and needs to be updated to a modern time where there are more single households. Continuing to use the outdated household concept that was started during a time when many women didn’t work and the divorce rate was low makes comparing time periods impossible. This has created, I believe, a skewing of the numbers that most people don’t understand and therefore give a false impression of income gap changes in the U.S. over time. I’m not even saying which way the income gap has gone – just that the statistics are comparing apples and oranges because of social change in this country.
Cj
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For what it’s worth to the people who think I’m misogynous. I’m happily married 17 years next month, childless by choice, and highly supportive of my wife’s career.
Cj
I thought that your article had a take on the subject I haven’t seen before. There are a couple more things I would like to mention. Claudia Golden has done remarkable research in this area. The modern women’s liberation movement did was enable women to formally work and get married, one to two hundred years ago women who chose to get an education/work did not get married. Also, measuring women’s wages by cohorts can adjust for choices concerning maternity and marriage. Another factor is job segregation numbers by gender which provides insight into the issue.
Surely it would be appropriate to examine other nations as well; the US is not the only place in which women’s lib occurred. See if, generally, women’s entry to the workforce correlates with rising inequality or not.
My guess is that it doesn’t necessarily; aren’t countries like Sweden known for both high levels of female workforce participation, assisted by generous maternity & paternity leave, subsidised childcare etc, *and* low income inequality? There are also probably countries with high income inequality & low female workforce participation; maybe Kuwait or Saudi Arabia?
I suspect that the increasing female workforce participation and increasing inequality happened at the same time, but one did not cause the other. If anything, you could make the case that wives went out to work in order to maintain family living standards in the face of their husband’s stagnating or declining real incomes…
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Sweden is a bit different from the US, though. The majority of Swedish mothers do work outside the home, but they tend to work in schools or childcare centers — not exactly male-dominated industries. And while Swedish parents often do not marry, they tend to live like married people i.e., both parents live together and are jointly responsible for the children. So a Swedish “single” mom is probably far more likely to be part of a stable, two-parent family than an American single mom.
It’s one of those curious paradoxes that the northern European countries held up as examples of progressiveness tend to be so very conservative in actual practice.
Sorry that’s just not true. Swedish women work in just as diverse fields as American women and live alone with children at almost the same rate as American women.
Jamie,
You missed the point of my post. What I’m saying is that the income inequality is at least somewhat false and only the result of misunderstood statistics. I’m not saying that women’s lib caused income inequality – in fact, I’m saying the opposite – but that it results in the statistics being skewed because the statistics are measured by *household* numbers. When you convert that to individual income numbers, the income gap narrows substantially.
Cj
I’m pretty sure some of my favorite economists have busted the myth that “[t]he divorce rate has increased steadily in the past half century.”
Citation?
Cj
“Look, women’s independence increased! So did income inequality! These things must be related!” Durrrrr….
A more specific counterargument: Single moms existed before women’s lib. Now, they have more access to better jobs because they’re not limited to low-income pink-collar work and companies have been forced to make some concessions for parents. Also, the increased access to birth control and condoms caused by women’s lib has almost certainly decreased the number of teen moms without high school diplomas and low-income women with more children than they can afford and allowed young women to pursue options such as higher education that result in a higher income, even if they do end up as single moms in the end. I would therefore argue that there are many reasons women’s lib likely mitigated the inequality-inducing effects of economic policies in the last few decades.
Lauren (and everyone),
You guys still aren’t getting my argument. First, what my argument is NOT:
I’m NOT arguing that women’s lib caused greater income disparity than we would have seen without it. That may or may not be true. I don’t know. But it’s not my argument.
Let me state it a different way:
My argument is that income disparity, when looking at *individual* incomes has not changed nearly as much as we think it has. I’m saying the statistics are messed up because of changes in social conditions of the home in the last 50 years that are not accounted for in the statistics. My argument on women’s lib is that it skewed the data to make it *appear* that the income gap is wider than it really is.
Let me illustrate by example:
Two typical families in 1950: Both have father working, mother staying at home and 2 kids. The household makes $60k per year (inflation adjusted).
Now fast forward to today. We still have the same eight people. But now one family is still married, the mom works and both parents make $60k per year. The other family is split up and the dad makes $60k per year and the mom makes $60k per year.
Individual income disparity has not changed at all. Each worker makes $60,000. It’s not like some “rich guy” is suddenly making so much more money than the other people.
But how do the CBO numbers see this?
1 household of $120k
2 households of $60k
ACK!!!! Income disparity is getting worse!!!!!
Um, no it didn’t. Social changes skewed the statistics.
Cj
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The earlier a person learns how to distinguish between a zero-sum and positive-sum games the better.
Great piece. Reading made me wonder how/if the movement affected our schools. How do schools and students today compare to the days when many of America’s most talented women were teachers because of cultural norms and the lack of corporate opportunities etc.? Is there a correlation showing how increased job opportunities for women affected schools and students?
It is mysoginic because even if you prove that the increase in labor supply decreased wages, both men and women had the right to belong to the labor force. Men could have abandoned the “labor race” and leave the place for women so that wages do not go down. If we hold women responsible for lowering wages after their “entry” into the labor force, why not holding men responsible for lowering wages after their “remain decision” into the labor force?
And fnaly, how about blacks? Did slave liberation decrease wages? Ah, yes, black men are still men, therefore with more (implicit) rights and value than any woman… (and yes, you are going to say this comment is “poorly rated”)
Noemi,
You missed the whole point of the article. It has nothing to do with who is responsible. It has everything to do with the fact that changes in societal demographics has made comparing two eras of data impossible. It’s about BAD STATISTICS. Nothing more.
Cj
Interesting point, but I believe the number of divorces has more to do with the smaller influence of religion nowadays. Maybe the point should have been: Did atheïst movement cause a larger income gap?