Are increasing earnings associations between partners of concern for inequality? A comparative study of 21 countries

This paper addresses the question to what extent the association between partners’ earnings matters for inequality between couples. First, we organize the existing literature to explain why studies come to a large variety of conclusions despite using, on occasions, the same data. Second, we use data from the Luxembourg Income Studies on 21 countries for a decomposition analysis based on log-linear models. We show that even though the correlation in earnings between partners increased in most countries, this only amplified inequality on some occasions. In most countries, increases in the earnings correlation are driven by general changes in employment rates. Given that these increases in employment equalized earnings across households through other pathways, the inherently connected increases in the earnings correlation are of less concern from an inequality perspective.