This chapter looks at the transmission of earnings inequality from individual to household. There are a number of factors at play. Some are related to labour market trends, such as the increasing polarisation of male earnings and changes in men's and women's
employment rates. Other factors relate to changes in the composition of households, such as increases in single‐headed households or growing marital sorting. The chapter begins with an overview of the development of individual and household earnings inequality,
and then examines patterns of change in its labour market and family formation drivers over the past 20 years. Finally, it analyses and assesses the relative contributions of labour market and demographic factors to the increase in overall household earnings inequality.