September 14 2011|08.00 AM UTC

Samantha Eckles

The Dual Income Family

Category: Personal FinanceTags: , , ,

The American economy began to embrace the foundation of the two-income family during World War II, when Rosie the Riveter led women into the workforce while men joined the military. Growing liberation through the course of the Twentieth Century allowed for increasing independence and equal rights for men and women. Today, the American economy is absorbing the two-income family, but is it possible a dual income family is actually a bad thing?

One 2003 study by a Harvard professor, released as the book “The Two-Income Trap,” shows that the two-income family is more likely to declare bankruptcy at some point than their societal counterparts. The rationale is that a non-working parent had previously been a safety net, providing services to children at home and available to get a job in times of crisis. As the second income has been absorbed into the economy, families have lost the safety net. Rather than providing extra savings, the second income has just upped the ante in a bidding war for a nice home in a good school district. Consequently, when either parent loses their job, there is little to fall back on.

Studies have shown a correlation between dual income families and divorce, but income level has a greater correlation. Women who have been employed 80% of the time since the birth of the first child are twice as likely to divorce as their stay-at-home counterparts, reports Kay Hymowitz in her study, Marriage and Caste in America.

That’s not to say the two-income family can’t work. Sociologists say that neither marriage nor modernity are to be done away with and somehow the two are going to need to learn to play together. For instance, insurance companies are offering safety nets specifically designed for dual income families in which the second income is essential. Businesses are also working to adopt more family-friendly policies to support dual income families. Families can also shift their lifestyle and spending patterns to more effectively leverage the second income, so the family’s economic security does not depend entirely upon it – essentially restoring the safety net.

The impact of the dual income has yet to be played out so only time will tell whether families can adapt to the challenges associated with it. How do you feel about a dual income family?

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