IDEAS home Printed from https://ideas.repec.org/p/cen/wpaper/19-19.html
   My bibliography  Save this paper

The Two-Income Trap: Are Two-Earner Households More Financially Vulnerable?

Author

Listed:
  • Jonathan Fisher
  • Nathaniel Johnson

Abstract

We test whether two-earner married couples are more likely to file for consumer bankruptcy in the future than similar married couples. Since two-earner households are unable to adjust their income on the extensive margin, they are more vulnerable to income shocks, and thus at risk of bankruptcy in the future. We find that two-earner married couples in 1999 are more likely to file for bankruptcy from 2002-2004 compared to other married couples. Additionally, we present supporting information that suggests that two-earner households have a higher average propensity to consume.

Suggested Citation

  • Jonathan Fisher & Nathaniel Johnson, 2019. "The Two-Income Trap: Are Two-Earner Households More Financially Vulnerable?," Working Papers 19-19, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:19-19
    as

    Download full text from publisher

    File URL: https://www2.census.gov/ces/wp/2019/CES-WP-19-19.pdf
    File Function: First version, 2019
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Claudia Goldin, 2006. "The Quiet Revolution That Transformed Women's Employment, Education, and Family," American Economic Review, American Economic Association, vol. 96(2), pages 1-21, May.
    2. Benjamin J. Keys, 2018. "The Credit Market Consequences of Job Displacement," The Review of Economics and Statistics, MIT Press, vol. 100(3), pages 405-415, July.
    3. Lundberg, Shelly, 1985. "The Added Worker Effect," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 11-37, January.
    4. Orazio Attanasio & Hamish Low & Virginia Sánchez-Marcos, 2005. "Female Labor Supply As Insurance Against Idiosyncratic Risk," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 755-764, 04/05.
    5. Goldin, Claudia, 2006. "The Quiet Revolution That Transformed Women’s Employment, Education, and Family," Scholarly Articles 2943933, Harvard University Department of Economics.
    6. Cullen, Julie Berry & Gruber, Jonathan, 2000. "Does Unemployment Insurance Crowd Out Spousal Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 546-572, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bellou, Andriana & Cardia, Emanuela, 2021. "The Great Depression and the rise of female employment: A new hypothesis," Explorations in Economic History, Elsevier, vol. 80(C).
    2. Stefania Albanesi & Maria Jose Prados, 2022. "Slowing Women’s Labor Force Participation: The Role of Income Inequality," Working Papers 2022-037, Human Capital and Economic Opportunity Working Group.
    3. Jochen Mankart & Rigas Oikonomou, 2017. "Household Search and the Aggregate Labour Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(4), pages 1735-1788.
    4. El-Mallakh, Nelly & Maurel, Mathilde & Speciale, Biagio, 2018. "Arab spring protests and women's labor market outcomes: Evidence from the Egyptian revolution," Journal of Comparative Economics, Elsevier, vol. 46(2), pages 656-682.
    5. Miki Kohara, 2008. "The Response of Wives f Labor Supply to Husbands f Job Loss," OSIPP Discussion Paper 08E007, Osaka School of International Public Policy, Osaka University.
    6. Lembcke, Alexander, 2014. "Home computers and married women's labor supply," LSE Research Online Documents on Economics 60269, London School of Economics and Political Science, LSE Library.
    7. Nelli, Linnea & Virgillito, Maria Enrica, 2023. "More than a She-recession: Long-term feminization and short-term pandemic effects," GLO Discussion Paper Series 1291, Global Labor Organization (GLO).
    8. L. Bryan, Mark & Longhi, Simonetta, 2013. "Couples’ labour supply responses to job loss: boom and recession compared," ISER Working Paper Series 2013-20, Institute for Social and Economic Research.
    9. Irastorza-Fadrique, Aitor & Levell, Peter & Parey, Matthias, 2023. "Household Responses to Trade Shocks," IZA Discussion Papers 16032, Institute of Labor Economics (IZA).
    10. Bennett, Patrick & Ravetti, Chiara & Wong, Po Yin, 2021. "Losing in a boom: Long-term consequences of a local economic shock for female labour market outcomes," Labour Economics, Elsevier, vol. 73(C).
    11. Julia Bredtmann & Sebastian Otten & Christian Rulff, 2014. "Husband’s Unemployment and Wife’s Labor Supply – The Added Worker Effect across Europe," Economics Working Papers 2014-13, Department of Economics and Business Economics, Aarhus University.
    12. Razzu, Giovanni & Singleton, Carl & Mitchell, Mark, 2018. "On why gender employment equality in Britain has stalled since the early 1990s," MPRA Paper 87190, University Library of Munich, Germany.
    13. T. Aldrich Finegan & Roberto V. Peñaloza & Mototsugu Shintani, 2008. "Reassessing Cyclical Changes in Workers' Labor Market Status: Gross Flows and the Types of Workers Who Determine Them," ILR Review, Cornell University, ILR School, vol. 61(2), pages 244-257, January.
    14. Pereira, Luciene & Santos, Cezar, 2017. "Casamentos Seletivos e Desigualdade de Renda no Brasil," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 71(3), September.
    15. Connolly, Laura E. & Jolly, Nicholas A., 2024. "Temporal Changes to the Added Worker Effect Associated with Spousal Job Loss," GLO Discussion Paper Series 1454, Global Labor Organization (GLO).
    16. Giovanni Razzu & Carl Singleton & Mark Mitchell, 2020. "On why the gender employment gap in Britain has stalled since the early 1990s," Industrial Relations Journal, Wiley Blackwell, vol. 51(6), pages 476-501, November.
    17. Bryan, Mark L. & Longhi, Simonetta, 2013. "Couples' Labour Supply Responses to Job Loss: Boom and Recession Compared," IZA Discussion Papers 7775, Institute of Labor Economics (IZA).
    18. Maria J. Prados & Stefania Albanesi, 2011. "Inequality and Household Labor Supply," 2011 Meeting Papers 657, Society for Economic Dynamics.
    19. Rania Gihleb & Osnat Lifshitz, 2022. "Dynamic Effects of Educational Assortative Mating on Labor Supply," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 46, pages 302-327, October.
    20. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.

    More about this item

    Keywords

    added worker; personal bankruptcy;

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • K3 - Law and Economics - - Other Substantive Areas of Law

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cen:wpaper:19-19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dawn Anderson (email available below). General contact details of provider: https://edirc.repec.org/data/cesgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.