Family Structure and Income Inequality in Families With Children, 1976 to 2000

Using 24 years of data from the March supplements to the Current Population Survey and detailed categories of family structure, including cohabiting unions, I assess the contribution of changes in family structure to the dramatic rise in family income inequality. Between 1976 and 2000, family structure shifts explain 41% of the increase in inequality, but the influence of family structure change is not uniform within this period or across racial-ethnic groups. In general, the estimated role of family structure change is inversely related to the magnitude of the changes in inequality. Furthermore, by including cohabitation, I find lower levels of total inequality and a weaker role for demographic shifts in family structure for trends in income inequality.