One of the more interesting papers on the subject attributes almost all the increase in income inequality over the past 50 years to assortive mating. As it turns out, better-educated people are considerably more likely to marry before having children, far more likely to be employed and stay married. The math here is simple. Assortive mating leads to higher levels of income inequality between households because individuals with higher income are more likely to marry other high earners, and vice versa.
So it gets back to basics. Choices determine how much schooling we get, where we live, whom we marry and when we bear children. These choices largely decide household earnings.
Michael J. Hicks, Ph.D., is director of the Center for Business and Economic Research and a professor of economics at Ball State University. Contact him at email@example.com.