Family Policy: Neglected Determinant of Vertical Income Inequality

Abstract

This chapter develops a research agenda for examining family policy outcomes with respect to vertical economic inequality between households, arguing that family policies have wrongly been neglected as a determinant of vertical economic inequality. Three questions are central to this research agenda: who uses family policy, to what income effect, and with whom do people live? Family policies have been linked to women’s employment and earnings, and to lower vertical income inequality. Yet, the literature also makes abundantly clear that family policies come with trade-offs along the lines of gender and class, as well as Matthew effects. These mechanisms need to be better understood to integrate family policy in analyses of—and recommendation against—high and rising inequality. The challenge ahead is to understand what (combination of) family policies may be inclusive to a wide range of families across the full width of the income distribution.