The last 30 years have seen a dramatic change in women’s social and economic status in the United States, particularly in their labor market activity. When women were less involved and less successful in the labor market, many of them gained access to market income only or primarily through marriage or cohabitation with a working man. As a result, women and children were especially vulnerable to the death of a partner, separation, or divorce.
In this article, the authors examine three decades of data on the relationship between women’s labor market activity and the income mobility of families that lose a spouse through death, divorce, or separation. The authors find that wives’ labor market activity acts as partial insurance for women and their families against the negative economic consequences of marital dissolution. However, the authors also find that while women who lose their husbands increase their earnings significantly, the number of upwardly mobile families is quite small, and a majority of families actually move down by the end of each decade. In addition, families that lose a wife to death, divorce, or separation do less well in successive decades, as the wives make increasingly larger contributions to family income. These findings imply that U.S. social and economic policies currently leave considerable gaps in “insurance” for families in the event of marital dissolution.