Changes in the Distribution of Income Among Single Mother Families: Murphy Brown Meets Inequality

We document the demographic and economic forces underlying changes in income inequality among single mother families over the past three decades in the United States. Using decomposable measures of after-tax income-to-needs inequality, we examine within- and between-group inequality based on education attainment, age, past marital status, race, and employment status. We also conduct income factor decompositions to quantify the relative contributions of earnings, transfers, other income, and taxes to inequality. Our results from the March Current Population Survey show that income-to-needs inequality rose nearly 30 percent between 1979 and 2005. The demographic decompositions indicate that most of the change in inequality is occurring within groups, in part because of large, offsetting between-group changes in population shares and relative mean incomes. The most prominent economic factor underlying the rise in income inequality among single mother families is labor-market earnings, the latter of which was induced by rising variance of hourly wages