Nostalgia for a time when families thrived on a single income is widespread. In 2021, for instance, former Labor secretary Robert Reich guest starred on an episode of The Simpsons about America’s “vanishing middle class.” Promoting the episode on Twitter, he claimed that the Simpsons’ lifestyle—where high school graduate Homer works and his wife Marge stays at home—was no longer possible for many American families. Similarly, in a recent address to the Western Conservative Summit, Senator Josh Hawley said, “I want to see an American economy where you can raise a family on a single income. It shouldn’t be too much to ask.”

These concerns are not unfounded. Two-earner families struggle with the stress of juggling jobs, raising children, and keeping up with everyday tasks. For those parents working traditional nine-to-five jobs, everyday tasks come with tight margins. Something as simple as picking up the children from school becomes a complex web of delegation and schedule management, prompting families to introduce Asana boards and Google calendars to the grandparents so that parents can complete the workday. It’s no wonder folks wistfully look back to the Leave it to Beaver age.

If our parents or grandparents could manage with a single income, why can’t we? Diagnoses and solutions vary according to political beliefs. Robert Reich would point to the high union membership and high relative minimum wages as the key to mid-twentieth century success. On the right, Hawley and others cite an increasingly dense regulatory web and higher tax rates that have stalled economic growth, forcing both parents into the labor market.

Claudia Goldin, winner of the 2023 economics Nobel, presents a different view. Goldin has studied how and why women participate in the labor force. Her research, combining deep archival scholarship and cutting-edge quantitative methods, suggests that high wages—not low ones, like Reich and Hawley believe—account for the predominance of two-income families today.

Specifically, Goldin’s research points to a “U-shaped curve” that describes how women participate in the workforce. Start with the agricultural economy of a few hundred years ago, the type of household Laura Ingalls Wilder depicted in Little House on The Prairie. In this economy, women and men both work out of the home. Most agricultural households are not self-sufficient but do generate some additional goods that can be traded or sold to obtain other necessities. While men and women may engage in a different composition of tasks, both contribute to producing goods that could be consumed at home or sold in the market.

However, as incomes rise, such as when the economy transitions from agricultural to manufacturing, women tend to work less. The male “breadwinner” goes to the factory or the office, while the female stays home. Of course, women were hardly idle, focusing instead on the necessary household work of raising children, cleaning, and preparing meals. (Though many women also worked in the factories.) The prevailing household division of labor meant that the male breadwinner could come home to a restful evening, unwinding after the day’s office or factory work.

But with the transition from an “industrial” to a higher-wage “service” economy as the twentieth century progressed, things shifted again. The explosion of service-sector and white-collar jobs, such as being a clerk, meant that women could now earn a substantial wage in those industries. Additionally, while factory work was often seen as unsuitable for married women (either due to the physical labor involved or unsafe working conditions), no such stigma existed for office work. Slowly, women rejoined the labor market. The percentage of women between ages 25 and 54 with jobs or looking for work steadily crept up, from 42 percent in 1960 to 78 percent in August 2023—and not because women had to work to make ends meet. During this period, median female inflation-adjusted earnings doubled, from $26,560 in 1960 to $52,360 in 2022.

Economists like Goldin see rising wages affecting a person’s willingness to work in two ways—via “income” effects and “substitution” effects. With higher wages, the “income effect” implies that a family could maintain or improve its standard of living, even while working fewer cumulative hours, effectively “buying” more time for household activities like cooking and childcare. In the 1950s, this phenomenon led to most American families having one partner—typically the woman—stay home. On the other hand, the “substitution effect” dictates that higher wages will encourage people to work more. You’re more likely to work for a wage of $15 an hour than $10 an hour. Instead of buying more time with higher wages, families can buy more stuff—faster cars, larger houses, and better vacations.

Both effects are always present, but context determines which one dominates. At very low incomes, the income effect is more significant. As a family stops struggling to afford necessities such as housing and food, they can afford to have one parent leave the labor market. But as wages rise, the temptation to get both parents in the marketplace grows until they face a stark choice: either have both parents work or accept a substantially lower standard of living than family, friends, and neighbors who make that choice.

Goldin shows that these effects hold across countries. Lower-income countries (like many in sub-Saharan Africa) typically have high female labor-force participation. Middle-income countries (such as many in South America or Asia) typically have low female workforce rates; high-income countries (many in Europe and North America) typically have high rates again.

Not everything reduces itself to economics, as Goldin would be the first to admit. In addition to the forces described above, social norms and technologies play a significant role. Goldin has cataloged the cultural prohibitions on women working that slowed entry into the labor market in the early twentieth century. Similarly, technologies like the dishwasher, clothes washers and dryers, refrigerators, and microwave ovens made it somewhat easier to let both parents work outside the home. Machines can effectively halve the housework parents need to do in the evening.

Understanding that dual-earner families are the consequence of economic opportunity and rising wages does not make life any easier for struggling parents. But we should recognize that these parents are not toiling to meet basic needs—they are battling the adverse consequences of high wages, consequences they accept because they value having more money over having more time. Whether this is the right judgment to make, of course, is a contestable proposition. What Claudia Goldin’s work shows is that, paradoxically, reforms aimed at solving this issue by raising wages even more might only worsen it. As wages rise, more parents would be encouraged to join the labor market; we could even see some grandparents, who currently pitch in as free babysitters, consider delaying retirement a few more years. Whether that helps families and children, let alone society, is another question. 

Ideally, of course, incomes will rise in the twenty-first century as rapidly as they did in the twentieth. Helping parents of the future deal with the stresses this causes will require fresh solutions.

Photo: grinvalds/iStock


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