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Article Excerpt
Consumer Expenditure Survey data for 1960 and 1996 are used to examine the real consumption of single-earner and dual-earner households. Both real consumption quantities and budget shares of consumption categories were found to differ by household earner type. However, both real consumption quantities and budgct shares of the majority of consumption categories were more similar for single-earner households and dual-earner households with two full-time workers in 1996 than in 1960. Also, the savings rate of all household earner types improved significantly from 1960 to 1996.
Television often reflects society, and societal changes can be discerned by comparing popular television programs of different eras. In the 1950s, the Cleaver family of the Leave It to Beaver series epitomized the American single-earner household with the stay-at-home mom. In contrast, the Taylor family of the popular 1990s show Home Improvement featured the modem household with two parents engaged in paid work.
Implications of the rise of dual-earner households in the U.S. have been the subject of several kinds of studies. These include studies devoted to the implications for time-use (Goldscheider and Waite 1991; Shelton, 1992), for child-rearing (Bryant and Zick 1996), for income-specifically, whether two incomes are needed to achieve a living standard that one income provided in earlier decades (Walden 2001), and for consumption patterns (Rubin, Riney, and Molina 1990). Consumption is defined by economists as the value of goods and services purchased by households during a time period (Tregarthen and Rittenberg 2000, p. 413).
This study focuses on consumption patterns and is intended to make three contributions. First, the study extends the period of comparison to one longer than in earlier studies. The study thus affords a comparison of recent data (1996) with data from a period prior to most of the increase in dual-earner households (1960). Second, the study includes a focus on relative consumption between single-earner and dual-earner households with an objective of testing Duesenberry's hypothesis that consumption patterns of peer groups will become more similar over time. Relative consumption comparisons are made both for total consumption and for 13 consumption categories.
Third, in comparing consumption in the two years, the study is careful to compare inflation-adjusted quantities, where each consumption category is adjusted by a price index specific for that category. Thus, comparisons are made of the quantities of consumption categories rather than spending in the categories as in previous studies. Since it is the quantities of goods and services that should affect consumer utility, this approach is considered an improvement.
The following sections include a review of related work, discussion of the data and approach used, presentation of results, and a summary and discussion of implications.
RELATED WORK
The general consensus from several studies is that household earner type has little effect on how households allocate their spending after other relevant factors, most notably income, are taken into account. Strober (1977) and Strober and Weinberg (1977) found no difference in the consumption of durable goods and services for dual-earner and single-earner households after controlling for income. Bellante and Foster (1984) and Foster, Abdel-Ghany, and Ferguson (1981) found wife's employment had no impact on the purchase of labor-saving devices for households with the same income. However, Bryant (1988) did find that households with working women spent more on convenience goods and services.
If expenditure patterns do differ between single-earner and dual-earner households, the differences have been found for work-related categories. Bellante and Foster (1984) found that weeks worked of the wife were related to expenditures for child care and food away from home. Similar results were found by Vickery (1979) and Ketkar and Cho (1982). Jacobs, Shipp, and Brown (1988) also found that shelter expenditures were higher for households with a full-time working wife.
Duesenberry (1967) provides a theoretical basis for expecting that the consumption patterns of households with different numbers of earners will become similar, or, at least, will become more similar, over time. Duesenberry posits that the utility level achieved by a household depends not only on that household's absolute level of consumption, but also on the ratio of that household's consumption relative to the consumption of other households. This implies that household expenditure patterns, if different, will become more similar over time. Thus, we might expect the relative consumption of households with different numbers of workers to be more alike in 1996 than in 1960.
Rubin, Riney, and Molina (1990) conducted a study that is the model for the work that follows. They used Consumer Expenditure Survey data from 1972-73 and 1984 to examine the determinants of spending shares. Utilizing a regression model that controlled for income, number of children, and household earner type, Rubin, Riney, and Molina found little independent effect of household earner type on expenditure shares for 16 consumption categories. However, in comparing expenditure shares over time, the authors did not adjust each category of spending by a price index specific for that category. Thus, the authors were not able to analyze the quantities of consumption categories, and so their results are not directly comparable to those presented in this study.
DATA AND APPROACH
Household income and consumption interview data from the 1960 and 1996 Consumer Expenditure Surveys (CES) are used in the study (U.S. Bureau of Labor Statistics 1960, 1996). The CES data are based on a national sample of households designed to portray the civilian noninstitutional population. The two years provide a "before and after" picture of the work status of American households. From 1960 to 1996, the labor force participation rate among married women almost doubled, from 32% to 61% (U.S. Bureau of the Census 2001). Thus, the two years provide the data for examining consumption patterns before and after the rise of dual-earner households in American society.
Several restrictions were placed on the households used in the study to maintain their similarity in the two years. Data only for married households in the prime earning years (ages 25-55) with full-time working heads (those working 35 hours or more per week) with complete income records and no public assistance or retirement income are examined. (1) Spouses are classified as not working, working full-time (35 hours or more per week) or working part-time (between and 35 hours per week). Any children present in the household must be under 18 and not working, and the household must have no members other than the head, spouse, and children. Only the head and/or spouse can have earnings. These restrictions were imposed to allow a strict comparison of full-time dual-earner households, full-time single-earner households, and full-time/part-time dual-earner households with income from no other earners complicating the comparisons.
Quarterly consumption is aggregated into annual consumption to avoid the problems associated with "lumpy" purchases occurring during a particular quarter or season. Consumption in both years is divided into thirteen categories: food at home, food away from home, alcohol and tobacco, shelter, utilities, household operations and furnishings, apparel, transportation, health care, entertainment, education (including reading), personal care, and other (personal insurance, gifts, and miscellaneous). In addition, taxes and saving are compared for the households in the two years. Taxes include Social Security (FICA) contributions, and saving equals income minus total consumption and taxes.
A major consideration is the use of inflation adjusters to convert 1960 dollars to real 1996 dollars. Since the prices of individual consumption categories likely changed at different rates between 1960 and 1996, inflation adjusters are desired that, to...
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