Family Policies, Women’s Earnings, and Relative Inequality Among Households: Trends in 18 OECD Countries from 1981 to 2008

This paper examines to what extent family policies have been associated with women’s earnings and earnings inequality among coupled households, using LIS data from 18 OECD countries, from 1981 to 2008. Women’s earnings contribute more to reducing inequality among households in countries with generous paid leave and public childcare, because these policies were associated with higher female labour force participation rates (FLFP). While a higher FLFP was associated with a more strongly positive correlation between spouses’ earnings, increasing the contribution of women’s earnings to inequality among household, it was also associated with lower earnings inequalities among women and with women contributing a larger share to household earnings. These latter two factors were found to attenuate household inequality to a larger extent than the higher correlation between spouses’ earnings contributed to household inequality. We found no association between financial support policies, such as family allowances and tax benefits to families with children, and the degree to which women’s earnings contribute to inequality among coupled households. Countries with family policy arrangements that facilitate women’s employment and earnings contribute to smaller inequalities among households.