Covid and the income gap between family structures

Family structure can influence household income in a number of important ways. From the motherhood penalty, to the financial advantages of a dual-income-no-kids household, to the pros and cons of having extended family under the same roof. Caring for children increases expenses and can limit household labor supply. During the Covid Pandemic, the shut-down of schools, daycares, and businesses increased the challenges for household labor supply in families with kids, particularly those young enough to need 24-hour supervision. This paper uses the Survey of Household Economics and Decision-making (SHED) data to investigate how the Covid pandemic affected household income heterogeneously related to family structure and childcare limitations. This work proposes an income gap between households with children under eighteen years of age and households without children under eighteen years of age, and finds that this income gap widens as a result of challenges related to the Covid pandemic. JEL: J00 J12 J22 D10