Is Dual Income Costly for Married Couples? An Analysis of Household Expenditures

This study analyzed annual household outlays in the recent Consumer Expenditure Survey to obtain the cost of dual income for married couples. Of the crude differences between two- and one-earner married households in payments and expenditures, the portion reflecting structural differences in demand was obtained through decomposition as the measure of the cost of dual income. We found dual-earner couples’ work-related expenditures diminished fulltime working wives’ net contribution by 1.7 % of their average earning. Greater tax burden and Social Security payments diminished fulltime working wives’ net contribution by additional 2.0 and 3.4 % of their average earnings, respectively. Dual-earner couples contributed more to private pension plans and experienced lower levels of current-period consumption including consumption of market substitutes for housework.