Journal of Family and Economic Issues

, Volume 35, Issue 2, pp 161–177 | Cite as

Is Dual Income Costly for Married Couples? An Analysis of Household Expenditures

Original Paper


This study analyzed annual household outlays in the recent Consumer Expenditure Survey to obtain the cost of dual income for married couples. Of the crude differences between two- and one-earner married households in payments and expenditures, the portion reflecting structural differences in demand was obtained through decomposition as the measure of the cost of dual income. We found dual-earner couples’ work-related expenditures diminished fulltime working wives’ net contribution by 1.7 % of their average earning. Greater tax burden and Social Security payments diminished fulltime working wives’ net contribution by additional 2.0 and 3.4 % of their average earnings, respectively. Dual-earner couples contributed more to private pension plans and experienced lower levels of current-period consumption including consumption of market substitutes for housework.


Dual-earner households Consumption expenditure Marriage penalty Social Security Married women’s labor supply 


Recent government statistics indicated that 54 % of married-couple households had both spouses in the labor force (US Census Bureau 2011). The median income of married-couple households was nearly twice that of other households in the United States (DeNavas-Walt et al. 2010). Furthermore, dual income, especially as the pay gap between men and women narrows, could help married couples avoid poverty, enter the middle class, or even gain affluence (Cattan 1998; Frank 2007; Levy 1987). Among US households in the top 5 % of income distribution, three in four had at least two earners, whereas at the bottom income quintile only about one in twenty had two earners (US Census Bureau 2012). Dual income may also provide better health-insurance coverage (Murasko 2008). For society, dual income may equalize overall household-income distribution and lessen inequality (Cancian and Reed 1998; Danziger 1980; Lehrer 2000; Lerman and Yitzhaki 1985; Maxwell 1990; Pasqua 2008; Treas 1987).

Economic literature has also documented costs and disadvantages associated with having two earners in the household.1 Earlier studies that analyzed household consumption expenditures or time use of couples found that, compared to a traditional male-breadwinner couple, couples with working wives either incurred greater consumption expenditures to substitute for foregone housework or simply enjoyed lower levels of household production (Bellante and Foster 1984; Bivens and Volker 1986; Bryant 1988; Ferber and Birnbaum 1980; Jacobs et al. 1989; Lazear and Michael 1980; Rubin et al. 1990; Strober 1977; Strober and Weinberg 1977). Although not necessarily unfavorable toward married women’s employment, these studies did show that unpaid work at home had economic value and hence there was economic loss from doing less of it. Other studies found that direct work-related expenses such as those for transportation, clothing, and personal care reduced working wives’ net contribution to the household (Hafstrom and Dunsing 1965; Hanson and Ooms 1991; Strober 1977; Strober and Weinberg 1977). More recent literature noted that dual-income households paid more income tax than one-income households (Alm et al. 1999; Apps and Rees 2010), and contributed disproportionately to Social Security (Hassan and Lawrence 2007; House et al. 2008).

This study evaluated the overall cost of having a working wife as a second earner in the household by assessing the differences in payments and expenditures between the households in which the wife was employed fulltime and other households in which the wife was not employed. In doing so, this study also defined what constitutes work-related expenditures. Although existing literature provided ample evidence of the cost of dual income relative to couple households with one breadwinner and a fulltime homemaker, most studies focused on one or two particular sources of the cost instead of assessing the full cost. Little has been done to encapsulate the total cost of having a second earner. In this study we examined the entire array of household outlays using the 2010–2011 Consumer Expenditure Survey (CE) to compare the payments and expenditures of dual-earner married-couple households to those of one-earner married-couple households. This study is different from previous studies because instead of estimating the marginal effect of dual income on a particular expenditure or payment component, it evaluated a couple’s overall monetary net gain from having a second earner in terms of the total outlays including tax, Social Security, private pension contributions, work-related expenditures, and expenditures to substitute domestic services.

Another goal of this study was to determine how much of the cost of the second earner was explained by the structural differences in demand and how much was due to differences in household characteristics. Because wives who were employed might have been characteristically dissimilar from fulltime homemakers in ways related to their spending patterns, we decomposed crude differences between one- and two-earner households in payments and expenditures into one portion reflecting differences in family characteristics and another portion reflecting structural differences in demand. We considered the latter to be the measure of the cost of the second earner.

Findings from this study portrayed the cost-side conditions under which married couples made joint decisions about their labor supply. A high cost of dual income might discourage married women with reasonably high market productivity from pursuing employment and encourage them to withdraw from the labor market, a phenomenon referred to as “opting out” (Boushey 2005, 2008; Percheski 2008). Even when married women’s labor supply was not elastic to the cost (Blau and Kahn 2007; Goldin 2006), a high cost could diminish the working wives’ net contribution to the household and undermined the value of marriage. In the literature on married women’s labor supply the wage penalty as the benefit-side obstacle has been well documented but assessment of the cost-side obstacle remains incomplete. This study addressed the latter.

The Cost of Dual Income

We summarized below existing literature on how the second earner in couple households can affect the household’s tax payment, Social Security payment, private-pension contributions, and work-related consumption expenditures. There can be two sources of consumption expenditures possibly attributed to the second earner’s employment: direct work-related expenses such as transportation, clothing, and personal care; and expenditures to substitute market goods and services for the couple’s time at home.

Income Tax

The marriage penalty occurs when two individual earners pay a greater amount of income tax as a married couple paying taxes jointly than they would if paying separately (Steuerle 1999). US progressive taxation and redistribution policies have resulted in the marriage penalty and heavy transfer of income from two-earner households to single-earner households (Apps and Rees 2010). Literature on the marriage penalty argued that the federal income tax in particular favored married-couple households with one earner over dual-earner marriages. As a result of such differing tax treatment, the difference in household incomes between two- and one-earner households was less significant for disposable income than for pre-tax gross income (Pritchard 1990).

Indeed, a study using the 1980–83 CE data found two-earner households paid more personal taxes than one-earner households (Hanson and Ooms 1991). Analyzing the 1960 and 1996 CE data, Walden (2002) found couples with two fulltime earners paid more tax than other types of couple households in both real payment amounts and percentages of income. Several legislative measures were taken in order to alleviate the tax disadvantage to dual-income married couples. Although marriage tax-relief legislation in 1999 reduced the tax disadvantage to two-earner married couples, the marriage penalty for dual-earner households increased as married women’s earnings relative to men’s have grown (Alm et al. 1999). The Earned Income Tax Credit (EITC) mitigated the marriage penalty at lower income brackets (Dickert-Conlin and Houser 1998; Herbst 2010), but its overall effect on dual-income couples had remained ambiguous and controversial (Eissa and Hoynes 2004).

If the marriage penalty has deterred couples from becoming dual-earners, then the average tax differences between one- and two-earner households would underestimate the real tax costs to dual-income households. Nevertheless, one study found that dual-earner couples’ time-allocation decisions responded little to taxation (Leuthold 1981), and that tax reforms explained only a small fraction of the increase in dual-earner households from 1960 to 2000 (Bar and Leukhina 2009).

Social Security Payments

Contributions to Social Security also reduce households’ current disposable income. Because Social Security is both a social-insurance program and a redistribution mechanism, non-contributors can receive its benefits. With the current Social Security formula, a significant fraction of the noncontributory benefits are awarded to spouses and widows in order to compensate for domestic labor (Meyer 1996). Meyer (1996) argued that noncontributory benefits were most advantageous to married women with little earnings history and relatively high socioeconomic standing, and in reality did not always compensate for domestic labor. A related criticism of the Social Security formula was that it redistributed benefits from high-earning husbands to wives and widows with low or few earnings but had not been as successful in redistributing from high- to low-earning households (Gustman et al. 2011). In fact, a significant part of inter-household redistribution of the Social Security benefits was from two- to single-earner households with a fulltime homemaker (Apps and Rees 2010; Sandell and Iams 1997).

As women’s earnings as well as their employment in sectors that support contributory social insurance have increased (Deere and Doss 2006), so, in recent years, may have Social Security contributions of dual-earner households. We expected to find dual-earner couples have a greater Social Security burden than one-earner couples and that this burden partly diminishes the second earner’s net contribution to household income.

Private Pension Contributions

Unlike those for Social Security, private-pension contributions are voluntary and are not transferred to non-contributors. Unlike other types of household saving, private pension contributions are made from tax-deferred income typically deducted from the employee paycheck. Because of the redistribution of Social Security benefits from dual- to single-earner couples, the implicit rate of return to Social Security contributions would be lower for dual-earner couples than for single-earner couples (Mitchell and Zeldes 1996). This could induce forward-looking, consumption-smoothing dual-earner couples to save more for old age at the expense of current-period consumption when compared with single-earner couples with similar gross income (Apps and Rees 2010).

Using the Survey of Consumer Finances, Hassan and Lawrence (2007) found that married women and those that were cohabitating were significantly more likely to have an employer-sponsored retirement plan than women of other marital statuses. Using the Australian Household Expenditure Survey, Apps and Rees (2010) found that households’ saving behavior depended heavily on labor supply of the second earner, and particularly on a high propensity to save from the second earner’s income and low propensity to borrow among dual-earner couples. Given recent increases in married women’s employment in sectors that support employer-sponsored individual retirement plans (Deere and Doss 2006), we expected to find greater private-pension contributions among dual-earner households.

Work-Related Expenditures

Earlier studies of the cost of dual income focused on the consumption expenditures that dual-earner married households but not their single-earner counterparts may incur. These studies identified two sources of expenditure differentials. First, dual-earner households incur expenses (e.g., transportation, clothing, and personal care) related to the second earner’s work (Hafstrom and Dunsing 1965; Hanson and Ooms 1991; Strober 1977; Strober and Weinberg 1977). Second, dual-earner households may spend more than single-earner married-couple households on time-saving goods and services that can substitute for foregone household production (Bellante and Foster 1984; Bivens and Volker 1986; Bryant 1988; Ferber and Birnbaum 1980; Jacobs et al. 1989; Lazear and Michael 1980; Rubin et al. 1990; Strober 1977; Strober and Weinberg 1977).

Direct expenses resulting from employment of a second earner included those on clothing, transportation, and personal care (Hanson and Ooms 1991). Past research indicated that dual-earner households spent more than one-earner households on women’s clothing, transportation, and personal care (Hanson and Ooms 1991; Rubin et al. 1990), and that these additional expenditures reduced working wives’ net contribution to the household (Hafstrom and Dunsing 1965; Hanson and Ooms 1991; Strober 1977; Strober and Weinberg 1977).

The difference in such expenditures was particularly sharp among households in lower- and middle-income classes. Nevertheless, the difference between one-earner and dual-earner households in such expenditures may be getting smaller. Research that compared expenditure differentials between the two types of households from 1972 to 1984 found that expenditures for private transportation increased among one-earner households but not among dual-earner households (Rubin et al. 1990). A recent descriptive analysis of the 2009 CE data found that working wives still reported greater expenditures on transportation, vehicle maintenance, and personal care than non-working wives, but the differences were more modest than what similar studies had found in the past (Foster and Kreisler 2012).

The economic theory of household production predicts that persons with higher wage rates or greater valuation of money income are more likely to work in the market and adopt more goods-intensive and less time-intensive modes of household production (Becker 1991; Gronau 1977). This was also referred to as outsourcing of domestic tasks (Lippe et al. 2004). Hence, we would expect dual-earner households to spend more money on goods and services that can replace the time needed for domestic production.

Earlier literature on the foregone value of household production examined dual-earner couples’ additional consumption expenditures (Bellante and Foster 1984; Bivens and Volker 1986; Bryant 1988; Chan 2005; Ferber and Birnbaum 1980; Jacobs et al. 1989; Lazear and Michael 1980; Rubin et al. 1990; Strober 1977; Strober and Weinberg 1977), or investigated household time use and housework by family members when wives worked (Berardo et al. 1987; Bielby and Bielby 1988; Homan et al. 1991; Nickols and Fox 1983). These studies showed that unpaid work at home had economic value and hence economic loss was incurred when less was done of it.

Specifically, empirical evidence has shown that households with working wives spent more on time-saving nondurables than those with nonworking wives (Strober 1977). One study using the 1972–1973 CE data found the amount of a wife’s work was positively correlated with greater expenditures on “services that are expected to be sensitive to the value of time,” including child care and food away from home (Bellante and Foster 1984, p. 700). Another using the 1980–1983 CE data found that households with an employed wife/mother spent eight times as much on child care than those with a fulltime homemaker. Such costs reduced the second earner’s contribution by as much as 56 % (Hanson and Ooms 1991).

Evidence supporting the substitution of expenditures for household time was less consistent for household durables. As early as the 1950s households with working wives spent considerably more on household durables than those with wives not employed spent (Mincer 1960). Nevertheless, a later study using the Survey of Consumer Finances did not find wife’s employment to be an important predictor of major family expenditures for time-saving durable goods (Strober and Weinberg 1977). Subsequent research showed wives’ employment reduced household spending on durable goods, suggesting wives’ time and durable goods were complements rather than substitutes (Bryant 1988).

Using the 1960 and 1996 CE data, Walden (2002) found that dual-earner households in 1996 still differed from single-earner households both in terms of the amount of consumption and in terms of budget shares, but such differentials have significantly decreased over the years. A recent descriptive comparison of household time use and consumption expenditures by wives’ employment status revealed that the amount of money spent on time-saving services such as clothing care did not differ by the wife’s employment status, and that very few families regardless of earner types reported spending on housekeeping services (Foster and Kreisler 2012). Another recent analysis of time use and consumption expenditures found that household expenditures on market substitutes for housework were only weakly associated with wives’ household production time (Killewald 2011). Such analysis further suggests that working wives reduce their household labor hours without fully purchasing a market substitutes for their own time, i.e., opting out of housework. This study attempted to examine whether the additional consumption expenditures due to the second earner’s employment create a significant cost of dual income for married couples.

These studies have shown the cost of dual income relative to couple households with one breadwinner and a fulltime homemaker by focusing on only one or two particular sources of the cost. Our study is different from past studies because it attempted to accurately assess the total cost for a couple of having a second earner. First, we assessed the differences in tax, Social Security, private-pension contributions, and consumption expenditures between households with working wives and households with non-working wives. In answering this question, we also defined which consumption expenditures constitute work-related costs of dual income. Second, we measured the cost of dual income by singling out the portion of the difference in payments and expenditures that is explained by structural differences in demand between one- and two-earner households rather than the difference due to the differences in household characteristics.



We analyzed data from the 2010–2011 Consumer Expenditure Survey (CE) conducted by the US Bureau of Labor Statistics. The CE interview survey, conducted every 3 months, collected detailed household expenditure data through monthly as well as quarterly recalls. It also included data on household income and family characteristics. While certain expenditure categories reported in the diary portion of the survey, e.g., expenses for nonprescription drugs, were omitted in the interview survey, the CE interview survey accounted, on average, for 95 % of total household expenditures (Bureau of Labor Statistics 2012).

Households in the CE sample were interviewed for five consecutive calendar quarters before they left the survey and were replaced by a new sample of households. There were 7,419 households who participated in four consecutive quarters during the 2010–2011 year, for whom annual income and expenditure data could be computed. Working with the annual sum eliminated the problem of seasonal variation in income and expenditures. Refunds of tax and Social Security received during a year were subtracted from the total tax and Social Security paid.

To focus on the costs of dual income, we restricted our sample to 2,758 married couple households with a fulltime working husband with a wife who either worked fulltime or was a fulltime homemaker in her prime working years. Of these, we dropped 673 households with members other than dependent children because they may have contributed income and time to the household, incurred expenditures, or otherwise obscured the effect of wife’s fulltime employment on household income and expenditure. We then dropped 439 households in which husbands did not work fulltime, another 590 households in which wives were older than age 60 or worked only part-time. We also restricted the sample to households of less than six members (which covered 96 % of married households in the survey), and whose incomes or expenditures were not in the top or bottom one percentiles. Altogether, these restrictions resulted in an analysis sample of 919 households. Table 1 presents descriptive statistics of our sample.
Table 1

Descriptive statistics of the sample


Total n = 919

Wife employed fulltime n = 560

Wife not employed n = 359








Wife employed fulltime







Race of wife






















Education of wife

 Less than high school







 Some college







 College degree







Household life-cycle

 Children age <6







 Children age 6–11







 Children age 12–17







 Couple wife’s age <45







 Couple wife’s age ≥45







Housing tenure

 Owned with mortgage







 Owned w/o mortgage











































City size

 >4 million







 1.2–4 million







 0.33–1.19 million




























Wife’s age







Household size







Gross household incomea







Wife’s earninga







Consumption Expenditurea







All values are weighted

aIn US$

bWife’s earning included not only labor income but also income other sources such as profits from assets, scholarships, alimony, and Supplemental Security Income checks etc


Our first goal was to identify the differences in payments and expenditures between dual- and one-earner married households. We compared the differences in the distributions of income and payments between the two types of households. Because dual-earner households in general made more income than one-earner households, the differentials in tax and Social Security payments between dual- and one-earner households were partly due to differences in gross family income. We sought to control for gross family income by grouping households by income quintiles and making comparisons within quintiles.

Because differences in consumption expenditures between dual- and one-earner married households may have been due to differences in disposable income, we also grouped households by quintiles of disposable income and compared within those quintiles. We obtained disposable income by subtracting the income tax, Social Security contributions, and private-pension contributions from gross family income. We excluded payments for vehicle purchases from total consumption expenditure because the large, infrequent payments for them may not have reflected ordinary spending. Another relevant issue for comparing consumption of households was their differences in size and composition, implying important differences in needs. To account for these differences we equivalised income and consumption by dividing the household’s total disposable income and total consumption by the adult equivalence scale S = 1 + 0.7 × (A  1) + 0.5 × K where A was the number of adults and K the number of children ages 18 or less living in the household (Attanasio et al. 2012).

As the literature generally viewed direct expenses separately from the expenditures on market alternatives for housework (Foster and Kreisler 2012; Hanson and Ooms 1991; Strober and Weinberg 1977), we divided CE expenditure items into three categories: market substitutes for housework, direct expenses of wife’s employment, and all other categories. Market substitutes for housework consisted of food away from home, household operations, and household equipment. Household operations included expenditures on domestic services substituting for family members’ household production, including activities such as baby-sitting, day care, care of the elderly, other domestic duties, and housekeeping services. Based on the above literature, we calculated direct expenses of wife’s employment as the sum of expenditures in women’s clothing, transportation, personal care, and other miscellaneous expenditures such as occupational expenses and fees (e.g., union dues).2

In order to accurately measure the differences in work-related expenditures between dual- and single-earner households, it was necessary to find on what expenditure categories dual-earner households spent significantly more than single-earner ones. We estimated regression of each expenditure item on a dummy variable for the wife’s employment status along with socio-demographic control covariates to determine which expenditure items constitute work-related expenditures of dual-earner households. We conducted quantile regression at the median, and obtained the signs and significance of the regression coefficients for the wife’s employment status.

Finally, to extract from the expenditure differences the costs that dual-earner households incurred due to wives’ engagement in paid work, we employed the Blinder-Oaxaca decomposition technique. The differences in expenditures between the two types of households on the descriptive statistics reflected the consumption differences resulting from both differences in household characteristics and differences in demand structure caused by a wife’s working. The coefficients of the dummy variable for a wife’s working in the regression model of the expenditure categories shown in Table 4 represent the mean differences in expenditure levels controlling for all other household characteristics. Nevertheless, dual-earner households might be characteristically dissimilar from one-earner households in ways related to their decision on wives’ labor supply. Moreover, the effect of the characteristics on demand for expenditure (regression coefficients of the household characteristics) would differ between the two types of households because dual-earner households have particular demands for goods and services that can substitute for wives’ time for house work and direct work-related expenses. The Blinder-Oaxaca decomposition technique is especially useful for identifying and quantifying the separate contributions of group differences in demands (regression coefficients) by decomposing inter-group differences in mean levels of an outcome into those due to different observable characteristics across groups and those due to different effects of characteristics or “coefficients” of groups. We decomposed the differentials of tax, Social Security, private pension payments, work-related expenditure, and domestic expenditure into the portion attributable to different socio-demographic variables and the portion attributable to different propensity to consumption as shown in
$$ \sum {B_{j1} \bar{X}_{j1} - \sum {B_{j0} \bar{X}_{j0} = \sum {B_{j0} \left( {\bar{X}_{j1} - \bar{X}_{j0} } \right)} + \sum {\bar{X}_{j1} \left( {B_{j1} - B_{j0} } \right)} } } $$
where \( B_{ji} \) is a vector of OLS coefficients for the j-th dependent variable for the i-th group. The dependent variables j = 1,..,5 were tax, Social Security, private-pension payment, work-related expenditure, and domestic expenditures, respectively, measured as annual sums. The group indicator i equals one for dual-earner households and zero for one-earner households. As ***\( X_{ji} \) is a vector of household characteristics included in the right hand side of the OLS regressions, \( \sum {B_{j1} X_{j1} } \)is the dual-earner households’ average expenditure in j predicted at the mean of \( X_{j1} \), and \( \sum {B_{j0} X_{j0} } \) is the one-earner households’ average expenditure in j predicted at the mean of \( X_{j0} \). The household characteristics we considered were the wife’s age, ethnicity, and education, family life-cycle stage, family size, region, city size, housing tenure, and income. The regressions of tax, Social Security, and private pensions used the logarithm of annual gross family income as the income variable. The consumption-expenditure regressions used the logarithm of annual disposable income. Age, family size, and log income were continuous measures while other variables were sets of dummy variables, as shown in Table 1.

For our decomposition, we used the expenditure structure of one-earner households as the reference. Gaps therefore indicated the additional expenditure of dual-earner households relative to one-earner households. The first term on the right side of Eq. (1) is an estimate of the additional (or lesser) expenditure for dual-earner households resulting from differences in observable family characteristics. The second term on the right side of Eq. (1) is an estimate of additional (or lesser) expenditure for dual-earner households attributable to the differences in coefficients. These differences result from disparate treatment of dual-earner couples in the tax and Social Security systems, different demands or supply of private-pension programs for dual-earner couples, and different demands for market goods and services. The second term on the right side of the equation thus reflects structural differences between dual- and one-earner married households, and thus is interpreted as the measure of the cost of dual income.


Differences in Institutional Expenditures

Table 2 shows that, on average, households with fulltime working wives earned more and made greater contributions to tax, Social Security, and other private pensions than those with wives not employed. Dual-earner households had an average income of $115,986, of which $51,275 was contributed by working wives, i.e., about 45 % of gross family income for dual-earner households. Married-couple households without working wives had an average income of $82,493, which amounted to 71 % of dual-earner households’ average income. Compared to one-earner married households, dual-earner households paid a higher proportion of gross income for taxes (4.16 % compared to 3.12 %), Social Security (8.11 % compared to 7.52 %), and private pension (2.05 % compared to 1.35 %).
Table 2

Annual incomes, social security and private pension contributions by gross household income quintiles (US$): SD mean

Income quintiles







Wife employed fulltime?













n = 560 (60.96 %)

n = 359 (39.04 %)

n = 51 (27.51 %)

n = 134 (72.49 %)

n = 98 (53.65 %)

n = 85 (46.35 %)

n = 132 (71.71 %)

n = 52 (28.29 %)

n = 145 (79.25 %)

n = 38 (20.75 %)

n = 133 (72.92 %)

n = 49 (27.08 %)

Household income

115,986 (63,393)

82,493 (58,928)

41,944 (5,539)

34,081 (9,968)

66,230 (7,083)

63,937 (7,632)

88,345 (7,278)

89,466 (8,097)

118,065 (11,638)

119,907 (11,851)

206,177 (57,478)

209,231 (30,003)

Wife’s earning

51,275 (33,937)

708 (2,992)

20,964 (8,184)

528 (2,275)

29,615 (9,766)

1,119 (3,598)

38,944 (11,696)

553 (2,971)

54,416 (16,273)

1,584 (4,871)

87,644 (43,907)


 % income a

44.99 (14.37)

1.27 (5.49)

50.13 (19.84)

1.61 (6.95)

44.67 (13.66)

1.89 (6.8)

44.11 (12.58)

0.60 (3.35)

46.06 (12.8)

1.28 (3.96)

42.95 (15.18)


Income Tax

4,759 (13,846)

1,840 (9,812)

−77 (2,910)

−445 (3,833)

1,337 (5,094)

1,005 (5,565)

2,368 (6,717)

2,383 (6,737)

3,758 (9,013)

2,980 (11,324)

12,601 (22,722)

7,752 (19,707)

 % income a

4.16 (7.47)

3.12 (7.06)

2.09 (3.67)

1.85 (6.38)

3.50 (6.90)

3.41 (6.66)

3.72 (6.45)

4.23 (6.58)

3.74 (6.63)

3.66 (8.29)

6.34 (9.67)

4.46 (8.41)

Social Security

8,913 (3,932)

5,547 (2,959)

3,926 (2,073)

2,745 (1,316)

5,583 (1,567)

5,226 (1,841)

7,371 (1,933)

7,221 (1,541)

9,475 (1,638)

8,288 (1,371)

14,193 (2,379)

9,802 (1,312)

 % income a

8.11 (2.49)

7.52 (2.65)

9.51 (5.72)

8.04 (2.96)

8.47 (2.57)

8.19 (2.85)

8.33 (2.03)

7.95 (1.63)

8.03 (1.21)

6.94 (1.16)

7.20 (1.48)

4.76 (0.88)

Private pension

2,768 (6,030)

1,372 (3,836)

465 (1,107)

229 (931)

598 (1,678)

767 (2,987)

1,521 (3,046)

2,186 (4,119)

2,980 (5,200)

2,596 (4,728)

6,257 (9,226)

3,705 (6,420)

 % income a

2.05 (3.89)

1.35 (3.79)

1.10 (2.79)

0.57 (2.26)

0.87 (2.36)

1.26 (4.99)

1.67 (3.29)


2.48 (4.22)

2.21 (4.00)

3.22 (4.78)

1.82 (3.26)

All values are weighted

aCalculated as averages of individual households, not as the ratio of aggregate means

Sample excludes those employed part-time. Means that do not share subscripts within a quintile in the same row differ at p < 0.05 in the generalized linear model (GLM) test

In the top and bottom quintiles, dual-earner households paid greater proportion of gross income in tax than one-earner households. In all quintiles, dual-earner households paid a greater proportion of their income for Social Security than one-earner households did. In the bottom and top quintiles, dual-earner households paid a greater proportion of their income to private pension contributions than one-earner households did, but less in the second and third quintiles.

Differences in Consumption Expenditures

Table 3 shows that, overall, dual-earner households had a higher level of consumption expenditures ($23,403) than one-earner households had ($20,310), after accounting for the household size and composition by the adult equivalent scale. Differences in consumption expenditures might be attributable to budget constraints. The overall mean expenditure for dual-earner households can be higher because such households are more likely to be in the higher income quintiles. Comparing expenditures within quintiles defined by disposable incomes gives us a more accurate assessment of expenditure differentials between the two types of households.
Table 3

Frequencies and mean annual consumption expenditure (US$) by disposable income quintiles

Income quintiles

Frequency (%)

Expenditure (SD)

Expenditure/disposable income (SD)


Wife employed fulltime

Wife not employed

Wife employed fulltime

Wife not employed

Wife employed fulltime

Wife not employed


560 (100.00)

359 (100.00)

23,403 (11,205)

20,310 (12,383)

0.55 (0.23)

0.77 (0.35)


36 (6.39)

147 (41.14)

12,776 (4,742)

13,011 (5,006)

0.84 (0.31)

0.98 (0.44)


112 (19.95)

71 (19.85)

16,841 (5,979)

17,184 (5,663)

0.67 (0.23)

0.70 (0.34)


135 (24.06)

50 (13.95)

20,198 (7,607)

23,394 (8,266)

0.56 (0.20)

0.67 (0.23)


144 (25.62)

41 (11.43)

24,831 (7,816)

29,211 (17,610)

0.51 (0.16)

0.60 (0.32)


133 (23.99)

49 (13.63)

33,379 (13,354)

36,273 (13,879)

0.40 (0.15)

0.45 (0.18)

Expenditures and disposable income were adjusted for family composition by dividing expenditure by adult equivalence scale defined as S = 1 + 0.7 × (A − 1) + 0.5 × K (where A is the number of adults and K the number of children, aged less than 18). All values are weighted

The numbers of one- and dual-earner households by the equivalized disposable income quintile suggest that dual income allows many who might not otherwise do so reach middle or higher income status. Among one-earner households, 61 % were in the bottom two overall income quintiles; among dual-earner households, 74 % were in the top three quintiles. The within-quintile comparisons shown in Table 3 present a striking result. Dual-earner households did not spend more than one-earner households with a comparable level of disposable income. In fact, one-earner households had had higher expenditures than dual-earner households in all quintiles.

Work-Related Expenditures

In order to accurately measure the differences in work-related expenditures between dual- and single-earner households, we estimated a set of regression equations for consumption expenditures to determine which specific items constitute the second earner’s employment-related expenditures. Specifically, we ran a quantile regression for the amount of each consumption expenditure on a dummy variable for wife’s employment status and on other control variables, and obtained coefficients at the median. Control variables included log of disposable income, ethnicity, education, and age, family life-cycle stages, and family size, all previously shown to affect expenditures (Killewald 2011; Strober and Weinberg 1977; Walden 2002). Wife’s education and age were considered to account for differences in skills and knowledge in household-production technology. To control for geographic differences in prices, we included region and city size in the model. We also controlled for housing tenure because it can directly affect spending for shelter. Table 4 presents means, standard deviations, and the median regression coefficients of the dual-earner dummy for the given consumption item. (The coefficients of other control variables are summarized in Appendix Table 6). Because the descriptive statistics by income quintile suggested the first and fifth quintiles may be quite different from the other quintiles, we also estimated these regressions omitting the first quintile, omitting the fifth quintile, and omitting both the first and fifth quintile. The results were not sensitive to omission of the top and bottom quintiles (Appendix Table 7).
Table 4

Mean annual consumption expenditures (US$) and the effect of wife’s fulltime employment


Wife employed fulltime n = 1,145

Wife not employed n = 621

Effect of wife’s employment n = 1,766







Total consumption expenditure







Market substitutes for housework

 Food away from home







 Household operations







 Household equipment







Direct expenses of wife’s employment

 Women’s clothing














 Personal care















 Food at home





















 Alcohols and beverages







 Other clothing



































Expenditures were adjusted for family composition by dividing expenditure by adult equivalence scale defined as S = 1 + 0.7 × (A − 1) + 0.5 × K (where A is the number of adults and K the number of children, aged less than 18). All values are weighted. For the effect of wife’s employment, B quantile regression coefficients at the median and SE their bootstrap standard errors for the dummy variable indicating wife’s fulltime employment are reported, with each expenditure category as dependent variables and all other socio-economic variables as control variables. When used as the dependent variable in regressions, the expenditures were in $10,000. NS Non-significant coefficients and standard errors are suppressed. p < 0.1, * p < 0.05

Contrary to expectations, dual-earner households spent significantly less than one-earner households, all else equal. For the total consumption expenditure, the regression coefficient for the wife’s fulltime employment dummy variable was −0.07, indicating that dual-earner households annually spent about $700 less than one-earner households, all else being equal. Dual-earner households spent significantly less on food at home, shelter, utilities, entertainment, and clothing other than women. None of these five items were discussed in the literature to be either direct work-related expenses or market substitutes for housework (Foster and Kreisler 2012; Hanson and Ooms 1991; Strober and Weinberg 1977). Food at home represented expenditures for raw and processed food cooked at home. Shelter included expenses for repairs and maintenance of housing as well as all payments for home ownership, rent paid, or other lodging. Utilities consisted of payments for natural gas, electricity, water, garbage and trash collection, and telephone charges, among others (Bureau of Labor Statistics 2012). These three categories reflect at-home expenditures for goods or services used as an input to household production. We used the sum of the expenditures in food at home, shelter, and utilities to define domestic expenditures in the subsequent analysis.

Dual-earner households spent significantly more on only two expenditure items: household operations and miscellaneous categories such as occupational fees and dues, including those categorized as work-related expenditures in the literature (Foster and Kreisler 2012; Hanson and Ooms 1991; Strober and Weinberg 1977). Our results indicated that fulltime working wives spent more on goods and services related to market substitutes for housework and to the direct expenses of wife’s employment. In the subsequent analysis, we used the sum of expenditures on these two items to define work-related expenditures.

In sum, the overall mean expenditure for dual-earner households was greater than that for one-earner households. Dual-earner households spent significantly more on work-related expenditures than one-earner counterpart, which is consistent with prior research. They spent significantly less, however, on food at home, utilities, and shelter, i.e., domestic expenditures, and also spent less on entertainment and clothing for other household members. Domestic expenditures constituted 48 % of total consumption expenditures for dual-earner households, and 53 % for one-earner households. Finally, controlling for other variables, we found dual-earner households spent significantly less on overall consumption.

Results of the Blinder-Oaxaca Decomposition

Our results above indicate dual-earner households spent more on work-related expenditures and institutional expenditures and less on domestic expenditures. To determine differences in expenditures related to wife’s employment for dual- and one-income households, we decomposed expenditure differentials into two parts: one attributable to differences in the observable family characteristics, and the other attributable to differences in the regression coefficients reflecting the different demand structures resulting from the second earner’s employment. Table 5 presents our results on the differences in expenditures due to the differing structure of dual-earner households.
Table 5

Summary of blinder-oaxaca decomposition of the expenditure differential between dual- and one-earner households (US$, n = 919)


Income tax

Social security

Private pension

Work-related expenditure

Domestic expenditure

The amount of expenditures

  Dual-earner household \( \sum {B_{{j1}} \bar{X}_{{j1}} } \)

4,759 (599)

8,913 (169)

2,768 (256)

2,875 (176)

23,457 (482)

  One-earner households \( {\sum}B_{{j0}} \bar{X}_{{j0}} \)

1,840 (531)

5,547 (162)

1,372 (206)

1,560 (149)

24,950 (804)

  Differential \( \sum {B_{{j1}} \bar{X}_{{j1}} } - {\sum}B_{{j0}} \bar{X}_{{j0}} \)

2,919 (800)

3,365 (234)

1,395 (328)

1,314 (231)

−1,493 (938)

  Due to characteristics \( \sum {B_{{j0}} \left( {\bar{X}_{{j1}} - \bar{X}_{{j0}} } \right)} \)

1,918 (574)

1,604 (177)

941 (243)

425 (106)

4,211 (898)

  Due to structure \( \sum {\bar{X}_{{j1}} \left( {B_{{j1}} - B_{{j0}} } \right)} \)

1,001 (1,114)

1,762 (144)

454 (454)

889 (256)

−5,704 (1,049)

All values are weighted. Standard errors are in parentheses

On average, dual-earner households spent $2,919 (see fourth row in tax column in Table 5) more on tax than one-earner households in a year. Most of this difference was attributable to the socio-demographic characteristics of dual-earner households. For example, dual-earner households paid more tax because they earned more. As the bottom line of Table 5 shows, dual income caused an average additional tax payment of $1,001 a year to married couples, which constituted 2.0 % of the average annual earnings of wife employed fulltime.

Social Security and private-pension payments appeared to be the primary sources of the expenditure differential between dual- and one-earner households. Dual income resulted in an average additional Social Security contribution of $1,762 a year for married couples because of the different treatment of dual- and one-earner households with the same characteristics. This amounted to 3.4 % of the average annual earnings of full-time working wives. For private pension contributions, 32.5 % (or $454) of the difference may be attributable to the greater opportunity dual-earner households had through the employee-benefit programs provided to working wives.

We estimated costs of dual income arising from work-related expenditures to be $889 a year, accounting for 1.7 % of the average annual earnings of full-time working wives. The decomposition of domestic expenditure showed even if dual-earner households had the same preference for domestic expenditures as one-earner households had, their household characteristics would have required about $4,211 more annually in domestic expenditures (see fourth line of domestic expenditure column). Yet households with fulltime working wives spent about $5,704 less on domestic expenditures than comparable one-earner households. Dual-income households reduced the domestic expenditures by a magnitude of 6.4 times the cost of the work-related expenditures ($5,704/$889). Dual-earner households spent slightly more in work-related expenditures such as direct miscellaneous expenses and household operations that could substitute for working wives’ time for house work. They spent much less in domestic expenditures than the comparable one-earner households for items such as food at home, shelter, and utilities that constituted a large proportion of the total consumption expenditures. This resulted in less overall consumption expenditure for dual-earner households.

The household characteristics considered in these decompositions included logarithm of income. Because these estimates may depend on the use of logarithm, we also estimated the regressions using income variables in dollar amounts instead of logarithm of income. The results were not sensitive to the use of logarithm. (Estimates with the income amounts instead of log incomes are reported in Appendix Table 8).


This study analyzed the 2010–2011 CE data to obtain an assessment of the cost of dual income for married-couple households. Unlike previous studies that focused primarily on the differences in consumption expenditures, this study included differences in tax and Social Security contributions to obtain a comprehensive cost measure. Disadvantages of dual income in tax and Social Security had been mentioned in previous literature of different contexts, but neither had been precisely addressed as part of the cost of dual income in conjunction with the consumption expenditure differentials.

This study found that the major sources of the cost of dual income were institutional factors such as taxation and the Social Security system. Our findings confirmed the presence of the marriage penalty in taxation. They also indicated the dual-earner households’ disproportionate burden in Social Security. Considering wives in one-earner households would be eligible for spousal benefits of Social Security, it was evident that dual-income households would obtain significantly lower financial return to their contributions than their one-earner counterparts. Those who advocated privatization of Social Security and those that opposed the marriage penalty in taxation claimed that the institutional disadvantages may have negatively affected work incentives of married women (Mitchell and Zeldes 1996). We also found that dual-earner couples contributed slightly more in private pension plans than one-earner couples. On one hand, this may indicate dual-income households’ greater incentive to save and to compensate for their disadvantage in Social Security benefits as predicted by the literature (Apps and Rees 2010). In that sense, our findings support that dual-earner households are forward-looking and allocate financial resources for future consumption at the expense of current consumption. On the other hand, dual-earner couples’ greater private-pension contributions may partly reflect that they are more likely to have employer-sponsored retirement plan accounts than one-earner couples with similar gross income.

Considering the increase in divorce and the decrease in the duration of marriages, the working wives’ own Social Security contributions can still mean better financial security during retirement, which may be why dual-income households tolerate the disadvantage in the current period. At the same time, greater private-pension contributions made by dual-earner households—especially if matched by the employer—will ultimately provide more economic cushion and greater financial security during the period of unemployment and during retirement compared to the single-earner couples. Nevertheless, the high cost of dual income in tax and Social Security, coupled with dual-earner disadvantages in wages such as working spouse penalty or motherhood penalty (Avellar and Smock 2003; Song 2007), may contribute to the phenomenon of opting out or stalling of married women’s labor force participation.

Our findings showed that dual-earner households spent significantly less on overall consumption than one-earner households, all else equal, despite their supposedly greater needs to purchase market substitutes for housework as well as to pay for direct work-related expenses. According to our estimate, the cost of dual income arising from work-related expenditures, including purchase of market substitutes for housework as well as direct expenses for the second earner’s work, accounts for 1.7 % of the average earnings of wives employed fulltime. At the same time, we found dual income was negatively associated with the amount of domestic expenditures—the amount spent on items that were likely inputs of household production—by a magnitude of about 3.6 times of the cost due to work-related expenditures. In sum, dual income led households to spend slightly more in work-related expenditures but much less in domestic expenditures than comparable one-earner households spend. This resulted in an overall reduction in total expenditures.

Our estimate of the cost of dual income was substantially lower than previously measured. Using a middle-class sample from the 1980–1983 CE data, Hanson and Ooms (1991) had found the expenditure differential in the tax and work-related expenditures between the two types of households was 9.95 % of the dual-income couples’ average gross family income, whereas our estimates of the costs from the tax and work-related expenditure amounted only to 1.78 % of average gross family income or 4.18 % of average annual earnings of wives employed fulltime. Part of the difference between the estimates by Hanson and Ooms (1991) and ours may have been due to methodological differences. The methods used by Hanson and Ooms (1991) did not account for the expenditure difference attributable to differences in household characteristics. If couples with household characteristics that were positively correlated with expenditures were more likely to have working wives, it may have been their methods that led to an overestimation. Moreover, even when we followed their methods with the 2010–2011 CE data, we found the cost to represent only 5.25 % of the dual-income couples’ average gross family income. This may be interpreted to indicate a downward trend in the cost of dual income.

This relatively small cost of dual income due to work-related expenditures is consistent with previous findings that the gap in budget profiles between dual-earner households and single-earner couple households has narrowed and working wives do not spend more money on market substitutes for their housework even while spending less time on housework (Foster and Kreisler 2012; Killewald 2011; Walden 2002). As Killewald (2011) argued, our findings may also indicate that dual-earner households prefer a lower level of household production and accept a lower standard of living than otherwise similar one-earner households.

Moreover, expanding market alternatives and government programs also may have lowered the prices of time-saving market and public alternatives and affected the demand for household production. For example, the increase in married women’s labor-force participation and hence greater demand for childcare services may have resulted in increased availability of low-cost childcare and decreased cost of work-related expenditures. In fact, recent government programs and market alternatives have increasingly replaced household production for free or at a much lower cost than before (Alm et al. 1999; Juhn and Potter 2006; Lundberg and Pollak 2007; Teachman et al. 2000). Recent shifts in US antipoverty policy that promote marriage (e.g., termination of Aid to Families with Dependent Children, stronger child support enforcement), subsidize parental employment (e.g., Welfare-To-Work programs, expansion of Earned Income Tax Credit), and increase the availability of government-based alternatives to household production (e.g., eldercare) may have provided increased support for dual-earner households, especially among lower-income households. Whether the lower expenditures of dual-earner households signify a lower standard of living cannot be examined only by monetary outlays, which is a limitation of this study.

This study had several other limitations. First, our cost measurements may have been a lower-bound estimate of the true cost of dual income, given that secondary earners who face prohibitively high costs should have opted out from employment. Although we attempted to address such endogeneity of dual income to some extent within the decomposition framework, some characteristics that affected the couples’ employment decisions may have remained unobserved. Second, readers should interpret our findings with caution because our sample excluded households with wives who worked part-time and also cohabitating couples. While such exclusions helped us draw sharper distinctions, they mean our findings cannot be generalized to other populations. A future study comparing income outlays between cohabitating couples and legally married couples is much needed. Third, our study used the male-breadwinner households as the comparison group, although they are becoming less prevalent in the United States. We excluded households in which husbands were full-time homemakers because their expenditures would be quite different from the traditional male-breadwinner female-homemaker, given different preferences and intra-household bargaining structure (Jianakoplos and Bernasek 2008) as well as because of relatively small sample sizes. Future research that includes those households using a different dataset would be worthwhile. Another related limitation was that this study focused on the effect of married women’s fulltime employment and did not compare couples against unmarried individuals. This may be an important limitation because currently for many couples the economic disadvantage of dual income may affect initiation or continuation of marriage more than it affects the wife’s employment decisions. We believe that the cost of dual income among currently-married couples assessed in this study offers important insight for future studies on how these cost expectations affect working individuals’ choice between marriage and singlehood.


  1. 1.

    Although the second earner in a couple may not be female in theory, married couples in which the wife is the only earner are rare. We therefore use gender-specific language throughout the paper in discussing the income contributions of wives in households with working husbands. We excluded from our analyses households in which neither husband nor wife were employed.

  2. 2.

    Miscellaneous expenditures in CE included safety deposit box rental, checking account fees and other bank service charges, credit card memberships, legal fees, accounting fees, funerals, cemetery lots, union dues, occupational expenses, expenses for other properties, and finance charges other than those for mortgages and vehicles.



This work was supported by the Samsung Research Grant funded through Sungkyunkwan University, Seoul, South Korea (S2009-0446-000).


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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Department of Consumer and Family SciencesSungkyunkwan UniversitySeoulSouth Korea
  2. 2.RAND CorporationSanta MonicaUSA
  3. 3.Department of Nutrition and Hospitality ManagementUniversity of MississippiUniversityUSA

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