The Two-Income Trap (36 page)

3
Suzanne M. Bianchi, Lekha Subaiya, and Joan R. Kahn, “The Gender Gap in the Economic Well-Being of Nonresident Fathers and Custodial Mothers,”
Demography
36 (May 1999): 195-203.

4
Danielle Crittenden,
What Our Mothers Didn’t Tell Us: Why Happiness Eludes the Modern Woman
(New York: Simon and Schuster, 1999): 133-134.

5
U.S. Department of Education, National Center for Education Statistics, Table 177, “Total Fall Enrollment in Degree-Granting Institutions, by Level of Enrollment, Sex, Attendance, Status, and Type and Control of Institution, 1999.” Available at
http://nces.ed.gov/pubs2002/digest2001/tables/dt177.asp
[11/21/02].

6
Women now constitute 45 percent of managers, compared with just 18 percent in 1970. James Heintz, Nancy Folbre, and the Center for Popular Economics,
The Ultimate Field Guide to the U.S. Economy
(New York: New Press, 2000), p. 54; Diana Furchtgott-Roth and Christine Stolba,
Women’s Figures: An Illustrated Guide to the Economic Progress of Women in America
(Washington, DC: AEI Press, 1999) p. 19; U.S. Department of Education, National Center for Education Statistics, Table 226.

7
Furchtgott-Roth and Stolba,
Women’s Figures,
p. xvii.

8
In 2000, fully employed women with children under eighteen had median weekly earnings of $479, compared with $499 for women with no children. U.S. Department of Labor, Bureau of Labor Statistics,
Highlights of Women’s Earnings in 2000,
BLS Report 952 (August 2001), Table 9.

9
Even though 2001 was a recession year, the unemployment rate among women, at less than 5 percent, was still lower than it was at any point during the 1970s. The number of women-owned businesses has grown from fewer than 1 million in 1972 to more than 8 million in 1997. Furchtgott-Roth and Stolba,
Women’s Figures,
p. 37. The proportion of wives with higher annual earnings than their husbands nearly doubled in just sixteen years, from 11 percent in 1980 to 21 percent in 1996. Richard B. Freeman, “The Feminization of Work in the U.S.: A New Era for (Man)kind?” in
Gender and the Labor Market: Econometric Evidence on Obstacles in Achieving Gender Equality,
edited by Siv S. Gustaffson and Daniele E. Meulders (New York: Palgrave Macmillan, 2000), Table 1.4, Percentage of Women with Higher Earnings Than Their Husband, 1970-96.

10
In 1975, Congress passed Title IV-D of the Social Security Act, which expanded child support enforcement by states. The 1984 Child Support Enforcement
Amendments required states to withhold wages from noncustodial parents who fell behind in their child support payments. In 1988, Congress enacted immediate wage withholding, which went into effect in January 1994 for all new child support orders. For a discussion of child support enforcement reforms, see Elaine Sorensen and Ariel Halpern, “Child Support Enforcement: How Well Is It Doing?” Urban Institute, Assessing the New Federalism, Discussion Paper 99-11 (Washington, DC: Urban Institute, December 1999), pp. 11-16.

11
For example, a California assemblyman, James Hayes, was involved in a brutal alimony battle with his wife of twenty-five years at the same time he played a leadership role in the adoption of the California no-fault statute in the 1970s. At one point, he was able to cut his wife’s alimony to $200 a month, with the trial judge telling her “to get a job,” despite her having spent a quarter-century as a homemaker and having completed only one year of college. The decision was overturned on appeal. Allen M. Parkman,
No-Fault Divorce, What Went Wrong?
(Boulder: Westview Press, 1992), pp. 56-63; see also Weitzman,
The Divorce Revolution,
p. 211. A number of similar horror stories under Maryland’s 1980 statute are told in a report of a 1986 study in Montgomery County, Maryland. Rosalyn B. Bell, “Alimony and the Financially Dependent Spouse in Montgomery County, Maryland,”
Family Law Quarterly
22 (Fall 1988): 225. In 1984, the federal government required states to adopt support guidelines, although judges were not required to follow them. In 1988, under the Family Support Act, Congress required states to make support guidelines binding on judges unless a written finding was issued.

12
Elaine Sorensen and Ariel Halpern, “Child Support Enforcement Is Working Better Than We Think,” Urban Institute: New Federalism, Issues and Options for States, Series A, No. A-31 (March 1999), p. 4.

13
Elaine Sorensen and Ariel Halpern, “Child Support Enforcement.”

14
The bankruptcy filing rate for single mothers is 21.3 per 1,000 compared with 14.7 for married parents, 7.2 for unmarried childless women, and 6.1 for unmarried childless men.

15
Federal Reserve Board, Survey of Consumer Finances, 1998 Full Public Dataset. Available at
http://www.federalreserve.gov/pubs/oss/oss2/98/scf98home.html
[1/5/2003].

16
U.S. Department of Housing and Urban Development, Federal Housing Authority Single Family Mortgage Insurance Foreclosures, Cumulative by Number and Percent, 1982-2002. Unpublished Data. More than 10 percent of FHA-insured mortgages issued to single parents and originated between 1982 and 1990 have since resulted in foreclosure. The foreclosure rate for mortgages issued in the early 1980s is more than one in four.

17
Teresa A. Sullivan, Elizabeth Warren, and Jay Lawrence Westbrook,
As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America
(New York: Oxford
University Press, 1989). The 1981 data are based exclusively on court records, which listed only the type of case filed (joint petition or single petition), not the marital status of the person filing. We assumed that those filing jointly were married, as stipulated by the bankruptcy laws. Because there are significant legal advantages for a married couple to file on joint petition rather than two separate petitions, it is not unreasonable to assume that the single filers are not married or are separated. Data from 2001 suggest that a small number of the women who file for bankruptcy alone are in fact married, but this is offset by a small number who file jointly even though they are separated or divorced.

18
In 2000, 19.3 percent of not-married women were raising children on their own, compared with 16.9 percent in 1980. Calculated from data from U.S. Census Bureau, Table MS-1, Marital Status of the Population 15 Years Old and Over, by Sex and Race, 1950 to Present (June 29, 2001); Table FM-2, All Parent/Child Situations, by Type, Race, and Hispanic Origin of Householder or Reference Person, 1970 to Present (June 29, 2001). Available at
http://landview.census.gov/population/ socdemo/hh-fam/tabFM-2.txt
[11/3/02].

19
In 1981, the filing rate per 1,000 was only 2.1 for women filing alone, compared with 4.3 for men filing alone and 2.7 for couples filing jointly, providing another indication that we are likely overstating the filing rates for unmarried mothers in bankruptcy in 1981 and therefore understating the magnitude of the increase over the past two decades. Calculated from data from Warren, Westbrook, and Sullivan,
As We Forgive Our Debtors
; Statistical Abstract of the United States 1984, Table 50, Marital Status of the Population, by Sex, 1940 to 1982, and Table 51, Marital Status of the Population, by Sex and Age, 1982.

20
Calculated from data available on number of bankruptcy filings in 2002 from the Administrative Office of the United States Courts; U.S. Census Bureau, Table F- 10, Presence of Children Under 18 Years Old by Type of Family and Median and Mean Income, 1974 to 2000. Available at
http://www.census.gov/hhes/income/histinc/f10.html
[3/27/03].

21
Our projection is based on a linear regression of women filing for personal bankruptcy alone in the United States in 1981, 1991, and 2001. The R-squared value was 0.988. The calculation assumes that single mothers as a proportion of all single women filing for bankruptcy remained constant throughout this period. As we noted in the text, this assumption likely overstates the number of single women with children in the early 1980s and thus understates the growth in filings among this group from 1981 through 2001. The calculation also assumes that in 1981 and 1991 all single-filing women were not married and all joint-filing women were married. For 2001, actual marital status is used. Data for 1981 are from Warren, Westbrook, and Sullivan,
As We Forgive Our Debtors
. Data for 1991 are from Teresa A. Sullivan, Elizabeth Warren, and Jay Lawrence Westbrook,
The Fragile Middle Class: Americans in Debt
(New York: Oxford University Press, 2000).

22
Calculated from U.S. Census Bureau, Table F2, Family Households, by Type, Age of Own Children, Educational Attainment, and Race and Hispanic Origin of Householder, March 2000 (June 21, 2001). Available at
http://landview.census.gov/population/socdemo/hh-fam/p20-537/2000/tabF2.pdf
[12/3/02].

23
Fifty-six percent of single mothers in bankruptcy had occupational prestige scores in the middle 40 percent for women in the general population.

24
Bankruptcy data include current homeowners and women who lost their home in the past five years because of financial reasons. The home ownership rate among all single parents is from U.S. Department of Labor, Bureau of Labor Statistics, Consumer Expenditure Survey, 1999 (prepublished data), Table 1500, Composition of Consumer Unit: Average Annual Expenditures and Characteristics (data are for single person with children).

25
According to the papers she filed with the court, her workout with her mortgage lender required her to pay monthly mortgage costs (including back payments) of $1,435. In addition, she paid utility costs of $600 and property taxes of $2,700, for a total of $2,260 a month. Her take-home pay before her most recent raise was about $3,000 per month. Gayle later got a substantial raise, so the proportion of her paycheck dedicated to housing dropped to two-thirds of her total take-home pay.

26
“Full-time employment within marriage does not necessarily protect women from a declining standard of living after marital disruption. Full-time working women who contributed a relatively small amount to family income (either because of their own low wages or their husband’s high wages) experienced much larger declines in living standards than other women. Whereas women who did not work or worked only part-time before separation could enter the workforce or increase the number of hours they worked, full-time working women would have a harder time increasing their incomes without further training.” Bianchi, Subaiya, and Kahn, “The Gender Gap in the Economic Well-Being of Nonresident Fathers and Custodial Mothers,” pp. 192-200.

27
During the 1980s and 1990s, child support payment levels among men who paid in full averaged 18 percent of their income. Patricia A. McManus and Thomas A. Diprete, “Losers and Winners: The Financial Consequences of Separation and Divorce for Men,”
American Sociological Review
66 (April 2001), footnote on p. 260. Other studies have shown that real average child support payments changed only modestly between the 1970s and the mid-1990s, so, for simplicity’s sake, the same 18 percent estimate was used for the 1970s and the 2000 calculations. Anne Case, I-Fen Lin, and Sara McLanahan, “Understanding Child Support Trends: Economic, Demographic, and Political Contributions,” National Bureau of Economic Research, Working Paper 8056, Figure 1b. For a tabulation of Tom and Susan’s predivorce expenditures, see “Typical budget, four-person family” for “Tom and Susan” in note 121, chapter 2. The calculation of Susan’s postdivorce discretionary income adds full-time child-care costs for a preschooler and a grade-schooler. Child-care
costs based on the average expenditures for nonfamily care outside a child’s home for a mother working full-time (2,000 hours per year). Calculated from Richard L. Shortlidge and Patricia Brito, “How Women Arrange for the Care of Their Children While They Work: A Study of Child Care Arrangements, Costs, and Preferences in 1971,” Center for Human Resource Research, College of Administrative Science, Ohio State University, Table 15, Unadjusted and Adjusted Expenditures for Child Care, by Socioeconomic and Demographic Characteristics, 1971 (White Women with Youngest Child 3 to 5 Years of Age), and Table 17, Unadjusted and Adjusted Expenditures for Child Care, by Socioeconomic and Demographic Characteristics, 1971 (White Women with Youngest Child 6 to 13 Years of Age). The calculation assumes that Susan will keep the car or purchase another one of similar value. It also assumes that she keeps the same, predivorce expenses for the mortgage and health insurance.

28
For a tabulation of Justin and Kimberly’s predivorce expenditures, see “Typical budget, four-person family” for “Justin and Kimberly” in note 121, chapter 2. As in the 1970s example, child support is calculated at 18 percent of the ex-husband’s income. The calculation assumes that Kimberly keeps one car and Justin takes the other. It also assumes that Kimberly keeps the same, predivorce expenses for the mortgage, health insurance, and child care. We note that one-quarter of noncustodial parents provide health insurance for their children. Timothy Grall, U.S. Department of Commerce, U.S. Census Bureau, “Child Support for Custodial Mothers and Fathers” (October 2000), p. 5. If we assumed instead that the father provides health insurance for his ex-wife and his children, the family’s discretionary income would decline slightly less precipitously after divorce. Under this scenario, postdivorce discretionary income as a proportion of predivorce income would be 21 percent in 1973 and 6 percent in 2000—an improvement of 2 percentage points in both years.

29
In 1977 only 38 percent of families had a bank-type credit card, compared with 68 percent in 1998. Thomas A. Durkin, “Credit Cards: Use and Consumer Attitudes, 1970-2000,” Federal Reserve Bulletin (September 2000), Table 1. Available at
http://www.federalreserve.gov/pubs/bulletin/2000/0900lead.pdf
[12/3/02].