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Is Dual Income Costly for Married Couples? An Analysis of Household Expenditures

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Abstract

This study analyzed annual household outlays in the recent Consumer Expenditure Survey to obtain the cost of dual income for married couples. Of the crude differences between two- and one-earner married households in payments and expenditures, the portion reflecting structural differences in demand was obtained through decomposition as the measure of the cost of dual income. We found dual-earner couples’ work-related expenditures diminished fulltime working wives’ net contribution by 1.7 % of their average earning. Greater tax burden and Social Security payments diminished fulltime working wives’ net contribution by additional 2.0 and 3.4 % of their average earnings, respectively. Dual-earner couples contributed more to private pension plans and experienced lower levels of current-period consumption including consumption of market substitutes for housework.

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Notes

  1. Although the second earner in a couple may not be female in theory, married couples in which the wife is the only earner are rare. We therefore use gender-specific language throughout the paper in discussing the income contributions of wives in households with working husbands. We excluded from our analyses households in which neither husband nor wife were employed.

  2. Miscellaneous expenditures in CE included safety deposit box rental, checking account fees and other bank service charges, credit card memberships, legal fees, accounting fees, funerals, cemetery lots, union dues, occupational expenses, expenses for other properties, and finance charges other than those for mortgages and vehicles.

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Acknowledgments

This work was supported by the Samsung Research Grant funded through Sungkyunkwan University, Seoul, South Korea (S2009-0446-000).

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Authors and Affiliations

  1. Department of Consumer and Family Sciences, Sungkyunkwan University, Seoul, South Korea

    Seonglim Lee

  2. RAND Corporation, Santa Monica, CA, 90407-2138, USA

    Jinkook Lee

  3. Department of Nutrition and Hospitality Management, University of Mississippi, 202 Lenoir Hall, P.O. Box 1848, University, MS, 38677-1848, USA

    Yunhee Chang

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  1. Seonglim Lee
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Correspondence to Yunhee Chang.

Appendix

Appendix

See Tables 6, 7 and 8.

Table 6 Results of quantile regression the expenditures at median (US$, n = 919)
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Table 7 Sensitivity tests for subsamples: effects of wife’s fulltime employment from quantile regressions of expenditures
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Table 8 Sensitivity test: blinder-oaxaca decomposition of the expenditure differential between dual- and one-earner households using income in dollar amounts instead of logarithm of income (US$, n = 919)
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Lee, S., Lee, J. & Chang, Y. Is Dual Income Costly for Married Couples? An Analysis of Household Expenditures. J Fam Econ Iss 35, 161–177 (2014). https://doi.org/10.1007/s10834-013-9364-1

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