Tuesday, January 28, 2014

Households are matching incomes


From political calculations we see that income inequality among individuals has remained steady. But forming households adds income inequality over time. This is supportive of the idea that assortive mating is going on. The higher incomes tend to find mates in their income class, the effect is more dispersion among household income. Why has the household selection process become more selective? Less surplus means people leave less to romance and more to budget.

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