Income Inequality among Parents with College Aged Children: A Study of the Family as a Whole and Excluding Wives' Earnings
Some studies have discussed that measuring inequality should be based upon all types of households, not just married families. Other types of inequality include single parent families, families where the male or the female is the head of household, and households where parents live with the head of household. The present study used Kuznets' hypothesis to perform a regression analysis to show the distribution of income among a family. Our results were consistent with Kuznets' hypothesis. There was income inequality among parents with college-aged children, including family income as a whole and family income excluding the wives' earnings. Introduction Income inequality is a topic of recent interest. Simon Kuznets formulated a hypothesis that explored the amount of inequality among men and women. Our study used Kuznets' hypothesis to perform a regression analysis to show the distribution of income among a family. In our study, this hypothesis was used to show the income inequality among parents with college- aged children, including family income as a whole and family income excluding wives' earnings. For our purpose we obtained data from the U.S. Census Bureau for the years 1969 to 1996. Many age groups were considered in our study, such as: married-couple households where the adults were less than 40 years old, another between the ages of 40 and 64 years old, and finally where the adults were 65 years old and older. The groups conclusively did not include any children under the age of 18 years old. Our results were consistent with Kuznets' hypothesis. There was income inequality among parents with college-aged children, including family income as a whole and family income excluding the wives' earnings. Literature Review Past studies by C.Y. Cyrus Chu and Lily Jiang (1997), Gary Burtless (1999), Maria Cancian and Deborah Reed (1999), David Betson and Jacques van der Gaag (1984), and Rati Ram (1995) evaluated the issue of income inequality and indicated some of the causes of such inequality along with the effects in their models. One main discrepancy in these studies was the distribution of income as the family size varied. According to C.Y. Cyrus Chu and Lily Jiang (1997), income is referred to as family income or household income. Four possible components of income include wage earnings, property income, owner-operator income, and other incomes (Chu and Jiang, 1997; pg. 665). Chu and Jiang's research decomposed family income into the four groups mentioned and then further decomposed the wage income into specific age groups. According to Gary Burtless (1999), "American inequality surged in the 1980's and early 1990's" because the amount of working wives increased. The increase in family income inequality concurred with the dramatic increase in earnings inequality. The standard unit of measurement has been the Gini coefficient, a measure of the amount of inequality in the income distribution. This increase was seen more so among the American men. This study (Burtless, 1999) further concluded that the earnings of men fell steeply. To understand how steep the fall was, the extra contribution on wives' earnings was nowhere near the amount of the loss. As a result, by 1996, fewer men that were getting married to women who were already in the work force. In addition, there are other factors that contribute to inequality. Such factors include marriage rates, non-traditional mating, and the labor force participation of the married women. In the 1950's and 1960's many individuals viewed a working woman as one who is trying to make ends meet (Cancian and Reed, 1999; pg. 173). More recently, the trend of working married women may actually be contributing to the family inequality. This inequality was created because women were earning a certain amount of income per year but there was competition from the men. …