Real income equivalence among one-earner and two-earner families.

Abstract

In an earlier paper we proposed a technique for making income comparisons across various household sizes. In this paper we employ a modified version of that method to convert nominal income to some real equivalent comparable across families of a given size but with one or two family earners. We begin with a discussion of some of the conceptual difficulties involved in making cross-family size or structure comparisons in income. We then describe spending pattern differences between one- and two-earner families. The final section discusses our effort to convert nominal income into comparable real income units. We conclude that nominal income differences between two and one- earner families far overstate differences in standards of living. (excerpt)