Economic Circumstances and Family Outcomes: A Review of the 1990s

This review documents the economic context within which American families lived in the 1990s. Despite nearly full employment and growing income and wealth for many Americans, problem areas included persistent racial gaps in economic well‐being, growing inequality, and declining wages for young men. Women showed stronger income growth than men in the decade, and 2‐earner households became increasingly associated with advantage. We review the consequences of these trends and of economic well‐being generally on 4 dimensions of family outcomes: family formation, divorce, marital quality, and child well‐being. Despite hypotheses suggesting that women's earnings might have different effects on family outcomes than men's earnings, generally the review supports the expectation that both men's and women's economic advantage is associated with more marriage, less divorce, more marital happiness, and greater child well‐being. Important issues regarding measurement, reciprocal relations between family structure and economic well‐being, and race and gender effects remain unresolved.     

Dynastic inequality,mobility and equality of opportunity

One often heard counter to the concern about rising income and wealth inequality is that it is wrong to focus on inequality of outcomes in a “snapshot”. Intergenerational mobility and “equality of opportunity”, so the argument goes, is what matters for normative evaluation. In response to this counter, we ask what pattern of intergenerational mobility leads to lower inequality not between individuals but between the dynasties to which they belong? And how does this pattern in turn relate to commonly held views on what constitutes equality of opportunity? We revive and revisit here our earlier contributions which were in the form of working papers (Kanbur and Stiglitz 1982, 1986) in order to engage with the current debate. Focusing on bistochastic transition matrices in order to hold constant the steady state snapshot income distribution, we develop an explicit partial ordering which ranks matrices on the criterion of inequality between infinitely lived dynasties. A general interpretation of our result is that when comparing two transition matrices, if one matrix is “further away” from the identity matrix then it will lead to lower dynastic inequality. More specifically, the result presents a computational procedure to check if one matrix dominates another on dynastic inequality. We can also assess “equality of opportunity”, defined as identical prospects irrespective of starting position. We find that this is not necessarily the mobility pattern which minimizes dynastic inequality.     

What Explains the Decline in First Marriage in the United States? Evidence from the Panel Study of Income Dynamics, 1969 to 2013

Rates of entry into first marriage have declined sharply in the United States during the past half century, and there is evidence of broad gaps in marriage entry by race and education. Although a large literature explores the influences on marriage for single cohorts, there is little research that tests explanations for this decline across multiple cohorts. The authors use individual and contextual measures of employment and incarceration to predict transitions to first marriage in the Panel Study of Income Dynamics (1969–2013). They test two prominent theories of why marriage rates have declined: the decreased availability of “marriageable” men and the increased economic standing of women. They find that men's reduced economic prospects and increased risk of incarceration contributed to the decline in first marriage rates during the past 45 years in the United States, although these basic measures of economic and carceral conditions cannot explain the entire decline.     

Transformative Community Practice

ABSTRACT

The authors examine how well models and concepts of community practice fit their practice in an extremely low income urban African-American community. They describe the evolution of their agency's response to community disinvestment over the past 30 years. That response has been to create indigenous African-centered organizations that can transform how people see themselves, the community, and their futures. Early childhood education, social services, economic development, and leadership training and organizing are core programs. The authors urge model builders and educators to include the concept of transformation as a community change goal, and to strengthen attention to institution building skills, “cultural work,” and capital formation.     

Moving Up in Rural America: Economic Attainment of Nonmetro Latino Immigrants

Rapid Hispanic population growth represents a pronounced demographic transformation in many nonmetropolitan counties, particularly since 1990. Its considerable public policy implications stem largely from high proportions of new foreign‐born residents. Despite the pressing need for information on new immigrants in nonmetro counties and a bourgeoning scholarship on new rural destinations, few quantitative analyses have measured systematically the social and economic well‐being of Latino immigrants. This study analyzes the importance of place for economic well‐being, an important public policy issue related to rural Hispanic population growth. We consider four measures of economic mobility: full‐time, year‐round employment; home ownership; poverty status; and income exceeding the median national income. We conduct this analysis for 2000 and 2006–2007 to capture two salient periods of nonmetro Hispanic population growth, using a typology that distinguishes among nonmetropolitan areas by the categories of “traditional” immigrant destinations concentrated in the Southwest and Northwest, “new” immigrant destinations to capture recent and rapid Hispanic population growth in the Midwest and Southeast, and “all other” rural destinations as a reference category representing more typical nonmetro population trends. We also compare our results to those for metropolitan destinations. We find that place type matters little for stable employment but more so for wealth accumulation and income security and mobility. Compared with urban Latino immigrants, rural Latino immigrants exhibit higher rates of homeownership as well as greater likelihoods of falling into poverty and lower likelihoods of earning a measure of U.S. median income. From 2000 to 2006–2007, rural‐urban differences deteriorated slightly in favor of urban areas. We conclude by discussing implications of these findings and those of addressing rural immigrant economic well‐being more generally.     

Addressing economic vulnerability among low-income families in America: is the basic income approach a viable policy option?

ABSTRACT

Income instability characterizes the lives of many low-income families in America. Growing income inequality, wage stagnation, unstable jobs, and limited savings are only a few of the factors contributing to the chronic economic insecurity that many low-income families experience today. There has been a renewed interest in recent years in the idea of a basic income as a policy solution to address the problem of income instability. This brief provides an overview of the concept of basic income and discusses its strengths and limitations in promoting financial stability among vulnerable families in both the short- and long-term.     

Ignoring rights is wrong: re-politicizing gender equality and development with the rights-based approach

Corporate sponsors and humanitarian organizations have joined popular authors and international institutions in bringing attention to gender inequality though “smart economics” and “investing in women.” These social marketing messages and donor strategies mimic arguments for gender equality from the 1970s and 1980s. Rather than building on the rights-based development and best practices of the 1990s, they ignore the critical roles of political capacity and participation that the past forty years and feminist analysis of development achievements and failures have taught us are essential to taking on gender and economic inequality. Certain trends in foreign aid accountability share this silence on the importance of political capacity. In contrast, the rights-based approach to gender equality and development (RBA) is a political approach to development. We reconcile the need for aid accountability with the need for a focus on politics by outlining key political processes of the rights-based approach. The RBA is a way of doing development that is attentive to process and power. We can use the RBA not just as a guide for how to do development, but also as a way to think about processes as outcome measures. The processes that the RBA requires are processes that build capacity for marginalized women and people.     

Whither the evolution of the contemporary social fabric? New technologies and old socio‐economic trends

This article considers whether societies are witnessing another industrial revolution in the light of an assessment of the impact of technological change on today's socio‐economic fabric, especially with respect to employment, income distribution, working conditions and labour relations. The authors argue that the processes of innovation and the spread of what they term “intelligent automation” are likely to exacerbate incumbent patterns of uneven income distribution and power, some of which existed well before the arrival of the technologies concerned, while others have emerged over the past 30 to 40 years. They venture to consider policy implications on the basis of such developments.     

The structural roots of food insecurity: How racism is a fundamental cause of food insecurity

Rates of food insecurity skyrocketed during the COVID-19 pandemic, doubling overall and tripling among households with children. Even before the pandemic, the rate of food insecurity in the United States was “unusually high” compared to other rich democracies, and rates have not improved substantially over the last 25 years. What explains the lack of progress in addressing food insecurity? This article maps out an overview of the experiences, causes, and consequences of food insecurity in the United States. We demonstrate that racism is a fundamental cause of food insecurity, both because racism contributes to racial disparities in income and wealth, and because racism is linked to food insecurity independent of poverty and socioeconomic status. For example, people of color are more likely to experience racial discrimination, which is associated with food insecurity, and to live in states where stricter regulations and harsher punishments are tied to social assistance programs, including food assistance programs. Because racism is a fundamental cause of food insecurity, eliminating it requires going beyond “just” eliminating poverty. Instead, the fundamental cause must be tackled directly: racism itself, which is built into the structure of American society and entrenched in its institutions.     

Trend Analysis of Anticipated Lifetime Income Inequality among Post‐war Japanese Youth

This study aims to measure the inequality of anticipated lifetime income and the inequality of annual income among the younger generation (24–29‐year‐old men), and to examine any trends that can be found in terms of inequality between 1955 and 2005 in Japan. Anticipated lifetime income is defined in this study as the present value of the total anticipated annual income that one is likely to earn each year between the ages of 24 and 59 years, assuming that there is no intragenerational class mobility. The anticipated lifetime income for each young male is estimated using the Social Stratification and Social Mobility Survey dataset, which is a Japanese national cross‐sectional survey of social stratification and social mobility. An inequality in the anticipated lifetime income can be regarded as an “inequality of outlook” among the younger generation. As a result of this analysis, it was found that the Gini coefficient, the most general measurement of income inequality, had significantly increased for anticipated lifetime income between 1995 and 2005. At the same time, the gap between the Gini coefficient of anticipated lifetime income and that of annual income had narrowed. It is suggested that “inequality of outlook,” which cannot be easily identified using a superficial index, has increased significantly.     

How to measure and proxy permanent income: evidence from Germany and the U.S.

Permanent income (PI) is an enduring concept in the social sciences and is highly relevant to the study of inequality. Nevertheless, there has been insufficient progress in measuring PI. We calculate a novel measure of PI with the German Socio-Economic Panel (SOEP) and U.S. Panel Study of Income Dynamics (PSID). Advancing beyond prior approaches, we define PI as the logged average of 20+ years of post-tax and post-transfer (“post-fisc”) real equivalized household income. We then assess how well various household- and individual-based measures of economic resources proxy PI. In both datasets, post-fisc household income is the best proxy. One random year of post-fisc household income explains about half of the variation in PI, and 2–5 years explain the vast majority of the variation. One year of post-fisc HH income even predicts PI better than 20+ years of individual labor market earnings or long-term net worth. By contrast, earnings, wealth, occupation, and class are weaker and less cross-nationally reliable proxies for PI. We also present strategies for proxying PI when HH post-fisc income data are unavailable, and show how post-fisc HH income proxies PI over the life cycle. In sum, we develop a novel approach to PI, systematically assess proxies for PI, and inform the measurement of economic resources more generally.     

Wealth as Security: Growth Curve Analyses of Household Income and Net Worth During a Recession

Building on evidence of increasing inequality with the 2008–2009 recession, we asked whether households experienced different financial trajectories through the recession depending on initial income and net worth. Using growth curve models of households headed by young adults in the Panel Study of Income Dynamics, we compared the relationship between initial income and net worth and the rate of change of income and net worth from 1989 to 2011 among households with income above and below $50,000. We found different patterns of income change and different relationships among income, net worth, and their rates of change between high- and low-income categories. Results suggest initial wealth helped to stabilize income and wealth changes among higher income households, reducing financial insecurity.     

Inequalities in Transnational Families

Over the past two decades, interest in the transnational lifestyles of contemporary migrants has grown significantly. In this article, we focus not on transnational identities, processes or structures, but rather on the emergent literature on transnational families in the context of migration to the United States. Transnational family studies broadly fall into two thematic camps: 1) those that describe transnational households as cooperative units in the face of economic, political and legal constraint and 2) those that show how the conditions that lead family members to live apart exacerbate and create new sources of conflict within families. Whether highlighting family conflict or cooperation, contemporary transnational family studies differ theoretically from prior research on immigrant families. Instead of focusing on immigrant incorporation, this literature demonstrates how global structures of inequality at the macro-level affect the everyday lives of transnational family members, as well as how individual action reproduces or challenges these broader social inequalities.     

Is America coming apart? Socioeconomic segregation in neighborhoods,schools, workplaces,and social networks, 1970–2020

As income inequality in the United States has reached an all-time high, commentators from across the political spectrum warn about the social implications of these economic changes. America, they fear, is “coming apart” as the gap between the rich and poor grows into a fault line. This paper provides a comprehensive review of empirical scholarship in sociology, education, demography, and economics in order to address the question: How have five decades of growing economic inequality shaped America's social landscape? We find that growing levels of income inequality have been accompanied by increasing socioeconomic segregation across (1) friendship networks and romantic partners, (2) residential neighborhoods, (3) K-12 and university education, and (4) workplaces and the labor market. The trends documented in this review give substance to commentators' concerns: compared to the 1970s, rich and poor Americans today are less likely to know one another and to share the same social spaces. The United States is a nation divided.     

Family expenditures supporting children across income and urbanicity strata

Recent decades have seen growth in the level, geographic distribution, and repercussions of income inequality, with unequal access to enriching resources hypothesized to support the intergenerational transmission of inequality. Yet little evidence delineates economic or contextual variation in resources directed at children. Using data from the Consumer Expenditure Survey on 31,842 families, this study assessed how family expenditures vary across income and urbanicity strata. Results found that high income families spent proportionally more of their total budget on child resources and proportionately less on basic needs compared to lower income families. These patterns buttress arguments that access to enriching resources may be an important mechanism through which economic advantage is passed on to the next generation. Results further found that income disparities in expenditures were heightened in large urban areas and tempered in rural areas. Together results highlight both income and urbanicity disparities in families' expenditures on child-promotive resources.     

Spanning Borders,Cultures, and Generations: A Decade of Research on Immigrant Families

The authors review research conducted during the past decade on immigrant families, focusing primarily on the United States and the sending countries with close connections to the United States. They note several major advances. First, researchers have focused extensively on immigrant families that are physically separated but socially and economically linked across origin and destination communities and explored what these family arrangements mean for family structure and functions. Second, family scholars have explored how contexts of reception shape families and family relationships. Of special note is research that documented the experiences and risks associated with undocumented legal status for parents and children. Third, family researchers have explored how the acculturation and enculturation process operates as families settle in the destination setting and raise the next generation. Looking forward, they identify several possible directions for future research to better understand how immigrant families have responded to a changing world in which nations and economies are increasingly interconnected and diverse, populations are aging, and family roles are in flux and where these changes are often met with fear and resistance in immigrant-receiving destinations.     

Families in Later Life: A Decade in Review

Later-life families encompass the legal, biological, romantic, and kin-like relationships of persons ages 65 and older. Research on older families has flourished over the past decade, as population aging has intensified concerns regarding the capacities of families to care for older adults and the adequacy of public pension systems to provide an acceptable standard of living. Shifting patterns of family formation over the past half-century have created a context in which contemporary older adults' family lives differ markedly from earlier generations. Decreasing numbers of adults are growing old with their first and only spouse, with rising numbers divorcing, remarrying, forming non-marital romantic partnerships, or living single by choice. Remarriage and the formation of stepfamilies pose challenges and opportunities as older adults negotiate complex decisions such as inheritance and caregiving. Family relationships are consequential for older adults' well-being, operating through both biological and psychosocial mechanisms. We synthesize research from the past decade, revealing how innovations in data and methods have refined our understanding of late-life families against a backdrop of demographic change. We show how contemporary research refines classic theoretical frameworks and tests emerging conceptual models. We organize the article around two main types of family relationships: (1) marriage and romantic partnerships and (2) intergenerational relationships. We discuss how family caregiving occurs within these relationships, and offer three promising avenues for future research: ethnic minority and immigrant families; older adults without close kin (“elder orphans”); and the potentials of rapidly evolving technologies for intergenerational relationships and caregiving.     

Household wealth and the measurement of economic well-being in the United States

We analyze the level and distribution of economic well-being in the United States during the 1980s and 1990s based on the standard measure of money income and a measure in which income from wealth is calculated as the sum of lifetime annuity from nonhome wealth and imputed rental-equivalent for owner-occupied homes. Over the 1982–2000 period, median well-being increases faster when these adjustments are made than when standard money income is used. This adjustment also widens the income gap between African-Americans and whites but increases the relative well-being of the elderly. Adding imputed rent and annuities from household wealth to household income considerably increases measured inequality and the share of income from wealth in inequality. However, both measures show about the same rise in inequality over the period. We also find an increasing share of wage and salary income in our expanded definition of income among the richest 1% over the period but do not find that the “working rich” have largely replaced rentiers at the top of the economic ladder.      

Who Gets What? Gender Differences in “Spendable” Income

SUMMARY

Feminist policy makers need accurate measures of inequality in the economic well-being of men and women. In this paper, we explain why the wage gap by gender gives a misleading measure of women's relative economic well-being in the United States, emphasizing the effects of income pooling within households. We construct a household-level index of women's “spendable” income relative to men's that builds on Randy Albelda's (1988) “PAR index.” We improve on the PAR index in three ways. First, we account for economies of scale associated with additional household members. Second, we utilize the Current Population Survey to capture the impact of government taxes and transfers, providing an indicator of “spendable,” rather than “money,” income. Finally, as a step toward redefining the concept of “spendable” income, we deduct a lower-bound estimate of child care costs.