How Family Dynamics Shape Income Inequality Between Families With Young Children: The Case of Sweden, 1995–2018

Abstract Increased gender equality in the labor market and the home are both cited as stabilizers to income inequality between households, but shifts in the economic organization of families over the life course instead appear to amplify household income inequality. Using the case of Sweden, where men have taken longer parental leave in recent years and the age at parenthood continues to advance, we analyze between‐family income inequality for couples with a young child. Based on income data from population registers, we decompose how changes in family dynamics, pre‐ and postparenthood, contributed to income inequality in families with children between the years 1995 and 2018. Analyses show no evidence that assortative mating has increased and that a minor decline in inequality between couples over this 24‐year period resulted from two opposing trends: Dis‐equalizing changes related to women's postbirth income advancements were eclipsed by equalizing changes related to the postponement of parenthood. Postbirth income trends reveal how between‐family inequality increased through women's income development and decreased through men's. Our findings confirm the importance of family processes to household inequality and show the complex effects of both changes in the timing of parenthood and improved gender equality.