Women’s Employment and Economic Inequality Between Households

by

Rense Nieuwenhuis

• LAST MODIFIED: 28 October 2020
• DOI: 10.1093/obo/9780199756384-0252

Introduction

This article provides an overview of the emerging literature on how trends in women’s employment have affected levels of inequality between households. It also sets the stage for future research endeavors. The rise in female labor force participation, and in conjunction the rise in women’s earnings, has been one of the biggest changes in economic activity in recent decades and in many countries. These long-term trends in women’s employment and associated changes in families are discussed in the section on Family Revolution(s). As such, it is remarkable how little attention mainstream analyses of high and rising levels of economic inequality have paid to gender and women’s employment. The first section, on Economic Inequality: Horizontal versus Vertical Perspectives, sets out the distinction between two perspectives on economic inequality. The first pertains to economic differences between households across the income distribution, referred to as Vertical Economic Inequality. The second pertains to economic differences between groups, such as between women and men, referred to as Horizontal Economic Inequality. The next section, on Integrating Horizontal and Vertical Inequality, demonstrates that levels of vertical inequality are affected by horizontal inequality, in this case specifically applied to how economic differences between households are directly related to economic differences between women and men. There is by now a literature that clearly shows how the rise in women’s employment and earnings (and thus smaller horizontal differences between women and men) reduces vertical inequality between households. This has been demonstrated in a vast amount of Country-Specific Studies as well as in Country-Comparative Studies, a consensus that also resonates in a number of Research Overviews. The next section argues that although it has been convincingly demonstrated that women’s employment and earnings have had an attenuating effect on inequality between households, less is known about how and why this is the case and under which conditions. As such, it combines literature from various fields (including sociology, demography, and economics) to develop a Research Agenda to further the literature on the relationship between women’s employment and economic inequality between households. This section addresses six different questions: Who? is employed and has certain levels of earnings, and with whom do they form a household (With Whom? Homogamy and With Whom? Household Formation). These sections also cover determinants of women’s paid work, such as unpaid care- or housework. The next section covers What Income Effect? can be expected from, for instance, motherhood and housework, and whether these effects vary across the income distribution. The section on What Context? brings into focus the welfare state and public policies, and a final subsection briefly addresses the question of Which Methods? may be particularly effective to further this research agenda. This article concludes by acknowledging a few Outstanding Questions that are less developed in the literature and therefore less integrated into this article—but may nevertheless point to interesting venues for further research.

Family Revolution(s)

This section takes on broad perspectives on family change, contrasting work on the second demographic transition (SDT) theory to work on the Gender Revolution Framework (GRF). Although not explicitly dealing with the degree of inequality between households (or the influence of women’s earnings thereon), these theories attempt to explain the underlying major developments in families—including women’s economic activity. Van de Kaa 1987 laid one of the foundations of the theory of SDT, with a particular focus on below-replacement fertility. Of relevance to this article is in particular that this transition started among the higher educated, who developed individualistic norms, entered employment, and reduced their fertility. This theory had empirical success as well as instilled debate, which is synthesized in Lesthaeghe 2010. Sobotka 2008 differentiates between the lower and higher educated and argues that although the lower educated show reduced fertility in line with the SDT, it is not because of their norms changing to individualism, which challenges SDT. An alternative was formulated in the form of the GRF. Goldin 2006 contends that the decline in fertility (among other factors) has been a major factor in the rise in women’s employment. England 2010, however, argues that the rise in women’s employment has stalled because men haven’t adjusted to take up more care roles, and it incorporates perspectives on men’s roles. Goldscheider, et al. 2015 further develops the GRF and outlines how it differs from the SDT, and Goldscheider and Sassler 2018 examines conditions that may impede the completion of the gender revolution. Esping-Andersen 2016 presents a highly accessible overview of both SDT and GRF and shows empirical evidence that seems more supportive of the latter. Of key importance for this article on inequality is that the SDT started with the highly educated women who were the first to show higher employment rates and lower fertility rates. In contrast, the GRF sees fertility increasing again among highly educated women, in part because their highly educated (male) spouses spend more time on (unpaid) care work.

• England, P. 2010. The gender revolution: Uneven and stalled. Gender & Society 24.2: 149–166.

  DOI: 10.1177/0891243210361475

  Provides two hypotheses for the uneven nature of the gender revolution, with women taking on men’s roles but men not taking on women’s roles. (1) men had no (financial) incentive to take on women’s roles, and (2) a combination of individualism and gender essentialism: women entered traditionally men’s occupations only when there was no pathway in women-dominated occupations through which to achieve upward mobility compared to the gendered reference group.

• Esping-Andersen, G. 2016. Families in the 21st century. Stockholm: SNS Förlag.

  This book synthesizes the literature on the debates between the SDT and the GRF and provides empirical illustrations. Argues that a limitation of the SDT is that people’s preferences for number of children remained constant. Formulates a theory that fertility and other family outcomes bottom out when women’s empowered roles are not matched with men’s adoption of caregiving and housework, because of perceived unfairness.

• Goldin, C. 2006. The quiet revolution that transformed women’s employment, education, and family. American Economic Review 96.2: 1–21.

  Examines the long-term trends in women’s labor force participation, with an empirical focus on the United States. Distinguishes between three phases of evolution, followed by a “quiet” revolution. The latter was the result of three major exogenous shocks that were instrumental to the rise in women’s employment: (modern) birth control, (women’s) education, and household technologies.

• Goldscheider, F., E. Bernhardt, and T. Lappegård. 2015. The gender revolution: A framework for understanding changing family and demographic behavior. Population and Development Review 41.2: 207–239.

  DOI: 10.1111/j.1728-4457.2015.00045.x

  Compares the GRF on a conceptual level to the SDT with respect to (1) the driving force between women’s employment being changing norms (SDT) versus structural change of men’s changing behavior (GRF), (2) the role of family considered as important in adult lives (GRF) versus not being part of “higher-order needs” (SDT), and (30 expectations about future scenarios including strong families (GRF) or continued family decline (SDT).

• Goldscheider, F., and S. Sassler. 2018. Family policy, socioeconomic inequality, and the gender revolution. In Unequal family lives: Causes and consequences in Europe and the Americas. Edited by N. R. Cahn, J. Carbone, L. F. DeRose, and W. B. Wilcox, 199–215. Cambridge, UK: Cambridge Univ. Press.

  Synthesizes a wide range of sociological and demographic literature on how family policy and socioeconomic inequality have played a role in facilitating the first stage of the gender revolution, as well as the second stage. Concludes that the absence of family policies and the presence of socioeconomic inequality may impede the second stage but not stop its eventual completion.

• Lesthaeghe, R. 2010. The unfolding story of the second demographic transition. Population and Development Review 36.2: 211–251.

  DOI: 10.1111/j.1728-4457.2010.00328.x

  Synthesizes a vast amount of literature to address common critiques on the SDT theory. Posits that the SDT is distinct from the first transition, spread beyond northern/western Europe (including non-Western countries), and was not merely the outcome of the emerging market economy in CEE countries, and that the SDT is associated with a cohesive set of values leading to fertility postponement.

• Sobotka, T. 2008. The diverse faces of the second demographic transition in Europe. Demographic Research 19.8: 171–224.

  DOI: 10.4054/DemRes.2008.19.8

  Provides an early-21st-century overview of the SDT framework, highlighting an important paradox: while the lower educated are more likely to have more-traditional values (not in line with the SDT), their family behavior is strongly in line with the SDT. Examples of the latter include nonmarital childbearing, high rates of relationship dissolution, and long-term cohabitation.

• van de Kaa, D. J. 1987. Europe’s second demographic transition. Population Bulletin 42.1: 1–59.

  Prompted by decline in fertility to below-replacement levels in various European countries, this is one of the early accounts formulating the SDT theory. After the first demographic transition in Europe in the 1930s, the second was prompted by a shift in norms toward individualism and constituted a move away from marriage and parenthood. Concerns regarding population aging and the welfare state are discussed.