This project examines how the rise of women’s employment and earnings affected trends in economic inequality among all households, across OECD and European countries since the 1980s. So far, prominent explanations of economic inequality have neglected the potential impact of women’s rising earnings on inequality among households, even though it is one of the most profound developments in economic activity in recent decades.

This project theorizes and analyzes how trends in women’s employment and earnings affected vertical inequality: the extent to which household incomes differ. For economic inequality it matters a great deal whether the rise of women’s employment and earnings was predominantly among singles and single mothers, among women living in couples, or among households with additional earners that already were close to the top (or bottom) of the earnings distribution. In this project, I also study how institutional contexts shape employment and earnings of women across diverse households.

This proposed theory will be rigorously tested using state-of-the-art quantile regression techniques and longitudinal data from EU-SILC and LIS, combined with high quality indicators of institutional context. Empirical studies address four areas of particular interest: (A1.) family diversity including single parents, (A2.) causal inferences, and the impact of the institutional context that is characterized both by (B1.) family policy and (B2.) social security.

The purpose of this research proposal is to assess the capacity of the European social investment strategy to alleviate poverty in Sweden and other European countries. This social investment strategy, which is currently dominant in European social policy making, assumes that poverty is best combatted by public services preparing individuals for economic independence through employment, rather than through government expenditure on monetary transfers repairing poverty. Assessing this strategy is important for two reasons. First, inequality and poverty are rising across Europe, including in Sweden where inequality rose by about 25% since 1980. Second, for social investment to succeed, it is pertinent that the services improve employment, that this employment is sufficiently paid and secure to protect against poverty, and that the degree to which services reduce poverty by stimulating employment actually outweighs the possible increase of poverty associated with cutbacks in social protection. Whether this is actually the case, is as of yet unknown.

This research proposal will focus on two policy domains of immediate importance for the social investment strategy: labour market policy and family policy. For these types of policies, the following questions will be answered: To what extent: (a.) has the shift from cash benefits to public services increased employment, (b.) has employment reduced poverty, and (c.) was anti-poverty effects of employment offset by reductions in cash benefits?