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Is the Full-Time Housewife a Symbol of a Wealthy Family?

Do wives with high-earning husbands tend to choose to be full-time housewives? Are the households in which both spouses earn high incomes increasing? This article answers these questions. It also shows what kinds of impacts such changes in household income composition are having on income inequality among all households, and discusses the effects of the tax system. The analysis shows, at least with regard to younger households, that (1) high husband incomes have only a weak effect on restraining their wives' employment, and (2) the number of households in which both spouses earn high incomes is increasing. These changes in household income composition have contributed about 5 percent of the growth in overall inequality among households. The existence of the spousal deduction constrains the employment of wives with high-earning husbands, but its effects on equalizing overall household incomes is declining.