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A two-parent household isn't going to double its consumption of everything if both parents start working. First, because wages will be depressed from the new la
by zaroth 9y ago
A two-parent household isn't going to double its consumption of everything if both parents start working. First, because wages will be depressed from the new labor supply, the total income of the household doesn't double. Second because their tax rate will increase. Third because many things we consume in fixed units with little control over the total cost, like "health insurance".
But they will increase their consumption of some things, particularly when it comes to the direct cost of working, so the family may spend more on things like transportation, clothing, child care, home care & maintenance services, food preparation, grocery delivery, etc.
- jessaustin 9y agoIt could be that housing costs are soaking up the bulk of the second earner's pay?
- zaroth 9y agoHome ownership rate is currently near averages maintained since the 70s. But it increased substantially in the 40s-70s (from ~45% to 65%). So to the extent that rise was enabled by dual income households you’re absolutely right more demand for housing drives up housing prices and saps up the extra income.