Over the past 20-30 years, what changes have occurred that now make it necessary for many households to have two incomes to stay afloat?
In: Economics
In addition to what others have said, the growth in two-income households inflates the price of jointly-purchased assets in many cases – until two incomes are _necessary_ for such purchases.
Imagine selling a house. Three single-income couples are interested in the house and, whichever one buys it, you’re selling it for an amount that’s affordable for a single-income household.
Imagine selling the same house, but this time two single-income families and one two-income family are interested in it. The two-income household can offer more and so you sell it to them. So the price of the house is now higher.
As more families become two-income, they out-bid single-income households for housing and higher house prices become more common across the board. At that point, single-income households are financially incentivised to become two-income households, creating further house price rises.
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