Inequality Black-White Disposable Income Inequality: The Rising Importance of Single Women Elizabeth Krause

The share of tax units headed by single women is twice as large for Black units than White units, and this gender differential in tax unit structure significantly contributes to Black-White income inequality. I decompose the Black-White disposable income gap by tax unit structure categories to estimate single women’s contribution to racial income inequality and examine the extent to which this is influenced by taxes and transfers at the 10th, 25th, and 50th percentiles. The portion of the gap explained by single women without children has grown consistently since the 1980s while the share attributable to low-income single mothers has declined in recent years. At the median, single mothers account for an average of 26 percent of the gap from 1980-2022, and single women without children account for an average of 11 percent. The declining importance of single mothers is in large part due to redistribution of the tax and transfer systems and declining inequality between Black and White single mothers. For single women without children, their share of the gap is exacerbated by the tax code despite declining within-group racial inequality. Singles, particularly single women, represent an under-investigated group in research on tax policy and racial inequality. I provide evidence that single mothers and single women without children are important to understanding Black-White income inequality relative to single men as well as demographic and economic factors.