Inequality among American Families

From 1975 to 2005, income inequality amongAmerican families with children increased by two-thirds, a larger rise in inequality than for men’s hourly wages or for the incomes of all households. Trends in the labor market and family formation widened the economic gap between children. In the labor market, college graduates ’ earnings advantage increased over those with just a high school education. For families, growing numbers of low-income sin-gle parents led to increased inequality. Changes in family structure may have compounded edu-cational inequality. Growth in the number of sin-gle-parent families was concentrated among mothers with little schooling, producing what McLanahan (2004) calls the “diverging des-tinies ” of U.S. children (see also Ellwood and Jencks 2004). Adding further to class differ-ences among children, economic power of a different kind—women’s employment—also increased more among mothers who had at least completed high school (Cohen and Bianchi 1999). Earlier studies have examined the effects of education, family structure, and women’s employment on inequality, but labor market analysis has been disconnected from demo-graphic research. Estimates of the effects of single parenthood and women’s employment on family income inequality do not account for the growing earnings advantage of college grad