After the recessions of 1980 and 1981-82, family income in the United States expanded through most of the 1980s. The decade brought gains in living standards to most families, but these gains were not distributed evenly; the rich grew richer but the poor grew poorer. This article examines shifts in the sources of family income and family work patterns between 1979 and 1988 in order to address the question: Why were the period's income gains so unevenly distributed?

The first section describes the changes that occurred in the distribution of family income in the 1980s, and discusses some hypotheses about the sources of such changes. Part II examines sources of family income, focusing on growing inequality in the distribution of earned income. Earnings grew faster for families with high incomes than for those with low incomes because changing patterns of labor force participation reinforced growing inequality in both men's and women's wages. The author finds that families with limited access to the labor market--the young, the unemployed, the less educated--were left behind in the earnings-driven income growth of the 1980s.