The female drivers of income inequality

What to do about this unintended consequence of female emancipation? One route to greater income equality would be to restrict education for women and arrange marriages for them.

This article, by Lawrence Solomon, was first published by the Financial Post

Reducing income inequality is an imperative in our society. The Pope and President Obama have both called it the defining issue of our times. The 1% protesters took the issue to the streets, economist Thomas Picketty to the elites. How to deal with this shame?

Fortunately, thanks to recent research from one of the world’s premier research organizations, the drivers of income inequality have now been unmasked. Income inequality is fueled by personal desires, finds the study, “Marry Your Like: Assortative Mating and Income Inequality,” which examined demographic data from 1960 to 2005. Published by the National Bureau of Economic Research, the study found that income inequality has a lot to do with sex and education.

Since 1960, women have become much better educated, much better paid, and much freer to choose the mate of their dreams. The payoff in getting educated for everyone — male or female — has also increased. All this has been disastrous for those who deplore the growing income inequality between rich and poor in society.

The problem culminates in the choices made in marriage. In the pre-feminist-liberation days, girls grew up to be nurses and boys to be doctors. The nurse of the 1960s might then aspire to marry up by nabbing a doctor. Or girls might grow up to be legal secretaries and boys lawyers, with the secretary marrying up by landing the lawyer. The general effect of the society of the 1960s, when women weren’t as well educated and couples more often brought different incomes into a marriage, was an averaging or homogenization of household incomes. This homogenization tempered both extreme wealth and poverty.

For example, if a woman without a high school education married a man with a college degree, their household income would be 24% higher than the median for society. Even if she married a man who also didn’t have a high school education, their household income wouldn’t be far off the median — just 23% lower. A woman with a graduate degree who married a man with a graduate degree would be in a household whose income would be less than two-and-a half times that of an uneducated couple — not a huge gap between rich and poor.

By 2005, marriage dynamics had changed. The doctors and lawyers in society were as likely to be women as men, and those women now tended to marry other doctors and lawyers and others in the same socio-economic class. The nurses and legal secretaries had less opportunity to marry up, making them more likely to marry someone in their own socio-economic status. The general effect of women reaching parity with men has been stratification by economic and educational status.

When men and women with post-graduate degrees marry, they now pull in more than twice the median income, or almost three times the extra amount that their counterparts in 1960 earned. At the other end of the education scale, men and women without a high school education who marry earn 59% less than the median income today, much less than occurred in 1960. Put another way, the best educated households now have incomes more than five times that of the least educated groups, a more than doubling in the gap since the 1960s.

That higher education pays more than ever can also be seen by comparing couples who both had high school educations. In 1960, the couple earned a bit more than the median, in 2005 fully one-sixth less. When an uneducated woman marries a college-educated man today their household income is 15% below the median, compared to 24% above in 1960.

The trend to more education, and especially to more education for women, has promoted the rich-poor gap so many find unconscionable. What to do about this unintended consequence of female emancipation? One route to greater income equality would be to restrict education for women and arrange marriages for them.

An alternative would be to resign ourselves to our fate. Accept the fact that women are now educated, that they now earn a lot more, that they are now able to marry their equals, and that their education and their incomes make society as a whole richer. Income inequality — the Pope, Obama and the social justice grievance industry notwithstanding — may not be such a bad bargain for society.

Lawrence Solomon is research director of Consumer Policy Institute.

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About Lawrence Solomon

Lawrence Solomon is one of Canada's leading environmentalists. His book, The Conserver Solution (Doubleday) popularized the Conserver Society concept in the late 1970s and became the manual for those interested in incorporating environmental factors into economic life. An advisor to President Jimmy Carter's Task Force on the Global Environment (the Global 2000 Report) in the late 1970's, he has since been at the forefront of movements to reform foreign aid, stop nuclear power expansion and adopt toll roads. Mr. Solomon is a founder and managing director of Energy Probe Research Foundation and the executive director of its Energy Probe and Urban Renaissance Institute divisions. He has been a columnist for The Globe and Mail, a contributor to the Wall Street Journal, the editor and publisher of the award-winning The Next City magazine, and the author or co-author of seven books, most recently The Deniers, a #1 environmental best-seller in both Canada and the U.S. .

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