Two Income Trap

We did this one for book group this month. Using data from a survey of families in economic trouble, the authors find that families have less overall economic security where both parents work, compared to families in the past where one parent worked. This is because when both parents in a family are working, most of the money that they make goes towards fixed costs (like a mortgage). The title comes from the fact that if one parents has to step out of the labor market due to a family issue or layoffs, the valuable safety net of having the other parent step into the labor market (most often the mother) to make up some lost income is not available. They point to skyrocking levels of bankruptcy, but then show how excessive consumption, a common explanation, does not explain it.


(As a side note, I thought that they did not give enough thought to the fact that someone who has not been in the workforce for a long time will have a hard time finding a job in the area of their expertise. If the economy has been turning south, it will be even harder to find a job. And certainly, whatever job this person--probably the mother--could find will not pay even close to what was being earned by the husband.)


Policy implications at the individual level were minor. "Don't get into more house than you can afford" and "don't use all your income on fixed costs." There were a few more at the goverment/institutional level--things like not making bankruptcy harder for families, prohibiting large and unfair credict card interest rates, making risky loans harder to give, giving incentives for saving.

All in all, this was an ok book, but the authors didn't do a good job walking the line between researcher and general audience. It was packed full of anecdotes to make it accessible to non-economists, and they left all the meaty details out for the same purpose. But this left it feeling watered down and a little repetitive. Their academic articles would be better for the nuances of their arguments, and this book could have been condensed to a (admittedly lengthy) magazine article.

The discussion at book group took a long time to turn to the book. Baby Z was with me, and I was only peripherally involved because I was busy with him and because I didn't have much to say. I felt a little bothered that the woman who suggested the book was not there. Why did she like it? What kind of points did she think were discussion-worthy? We'll never know.