How does household production affect measured income inequality?

Theory predicts that lower-income households will produce more goods at home. Thus extended income, which includes household production, should be more equally distributed than money income. Previous studies have confirmed the greater equality of extended income and speculated that the result is due to the weak correlation between money income and household production. We also confirm this result and identify the true reason. We show that the weak correlation cannot be the explanation and that virtually all of the difference in measured inequality between the two measures is due to the addition of a large constant—the average value of household production—to money income.     

Migration and foreign trade: Further results

In this note, we use the production-theory approach to immigration in an open-economy setting to investigate the role of nonresident workers in Swiss aggregate production. Unlike earlier work in this area, exports are explicitly taken into account. Indeed, a statistical test for global separability between inputs and outputs reveals that exports and products intended for domestic use cannot be aggregated. Our results show that immigration tends to stimulate imports and to shift the output mix towards nontraded goods, thereby impacting negatively on the trade account. Received: 24 March 1999/Accepted: 4 January 2001     

The effects of female employment status on the presence and number of children

The main concern of this paper is to analyze the effects of female employment status on the presence and number of children in households in the Netherlands. For this purpose a hurdle count data model is formulated and estimated by the generalized method of moments. The hurdle takes explicitly into account the interrelationship between female employment status and timing of first birth. The number of children, once children are present in the household, is modeled conditional on female employment status. The empirical results show that female employment status is a major determinant of the presence and number of children in households: employed women schedule children later in life and have fewer children compared to nonemployed women, holding educational attainment constant. After controlling for female employment status, the educational attainment of both the woman and the man in the households are found to have relatively small effects on the presence and number of children. Received: 3 November 1998/Accepted: 22 September 1999     

Elements of private welfare production in Hungary (from time budget data)

Recently it has become recognized more and more widely in Hungary that in spite of the socialization of the means of production and the extension of the service institutions, the activities of households and individuals not taking place within the framework of large organizations contribute to an important degree to the welfare of society. On the basis of the results of the national time budget survey of 1976/77, four of these types of private activity are investigated: small-scale agricultural production, dwelling construction with personal resources, repairing of consumer durables and house-hold chores.     

Natives and migrants in the London labour market, 1929–1931

Migrants are sometimes regarded as marginal workers in metropolitan labour markets. London has long been a major destination for migrants from elsewhere in Britain and abroad. In this paper we examine the earnings and unemployment experience in 1929–1931 of male workers who migrated to London, or within London. We use data from the New Survey of London Life and Labour, a large survey of working class households, the records from which have recently been computerised. Our findings indicate that migrants were not marginal, in fact they enjoyed slightly higher earnings and lower unemployment incidence than native Londoners. Much of the advantage can be explained by differences in average skill levels and personal characteristics. Received: 2 November 1999/Accepted: 3 August 2000     

Macro and micro contexts of dependency rates: An illustration with peruvian data

This research contributes to the academic dialogue about the socioeconomic significance of rapid population growth by examining changes in age composition and household structure during a transitional period of demographic change. Two propositions relating changes in the size and age composition of households to the demographic transition are formulated and tested using Peruvian census and survey data. Results show a systematic pattern of change wherein the average annual percent increase in the number of households offsets the rate of population growth when the disequilibrium between mortality and fertility rates is greatest. The translation of aggregate increase into households is mediated by shifts in the distribution of households by size. It is inappropriate to conclude that larger families necessarily have higher dependency burdens or that they are worse off in an economic sense compared to smaller households because increments in size are not automatically translated into equivalent increases in age or economic dependency. In part, this is due to the influence of extension patterns on the age and labor force composition of households. Policy implications and a research agenda are discussed in the concluding section.An earlier version was presented at the 7th National Meeting of the Latin American Studies Association, Houston, Texas, November 2–5, 1977. I gratefully acknowledge critical comments from Michael E. Conroy, Harley L. Browning, A. Eugene Havens, Halliman Winsborough, and two anonymous reviewers. Research support for this paper was provided by the College of Agricultural and Life Sciences.     

The cost of children: May the collective approach to household behavior help?

The collective approach to household consumption behavior tries to infer from variables supposed to affect the general bargaining position of household members information on the allocation of consumptions goods and tasks among them. This paper investigates the extension of previous work to the case where children may be considered as a public consumption good by the two adult members of a household. The main question being asked is whether it is possible to retrieve from the aggregate consumption behaviour of the household and the relative earnings of the parents information on the allocation of goods between them and children. This alternative approach to the estimation of the ‘cost of children’ is contrasted with the conventional approach based on a ‘unitary’ representation of and demographic separability assumptions on household consumption behaviour. Received: 29 August 1997/Accepted: 26 November 1998     

Poverty and Headship in Post-apartheid South Africa, 1997–2006

In this paper, I investigate the characteristics and poverty status of female- and male-headed households in South Africa using nationally representative household survey data from the October Household Surveys (1997 and 1999) and the General Household Surveys (2004 and 2006). This decade (1997–2006) represents a period for which there is an extensive poverty literature documenting (particularly in the 2000 s) an overall decrease in the poverty headcount rate. At the same time, however, there is evidence to suggest that female-headed households have a far higher risk of poverty and that the poverty differential between female- and male-headed households widened over the period. The aim of this paper is to identify some of the main reasons that female-headed households are more vulnerable to poverty in post-apartheid South Africa and why poverty has decreased by more in male-headed households (relative to female-headed households). The study examines the key features which distinguish female- and male-headed households and whether these have changed over time. In order to link these characteristics with the poverty differential between female- and male-headed households, I then examine whether (and by how much) controlling for the observable differences between female- and male-headed households reduces the significantly greater risk of poverty in female-headed households.     

A new technique for measuring household changes

Because many recent policy decisions have been aimed at effecting changes in the socioeconomic characteristics of families or households, it has become necessary to isolate policy-induced changes from demographic changes in households over time. To obtain such longitudinal data, the family records from three panels of the Current Population Survey that were interviewed both in March, 1964, and March, 1965, were used in a computer record-matching operation.The resulting data confirm that approximately 20 percera of all households are mobile in the period of a year as evidenced by the nonmatched households that were found in 1964 but not present in 1965. More important, the data indicate that S percent of the nonmobile family households became individual households, or the reverse, and 15 percent of all the remaining households changed in family size. These last two statistics represent the first national estimates of gross changes in the demographic characteristics of households.In addition to data on changes in households, this relatively inexpensive method can be used to match Current Population Survey persons' records and provide longitudinal data on the persons within households. Over all, this prototype technique offers policy planners an analytical tool with the necessary statistical controls for assessing the effects of policy decisions and predicting policy success.     

Social programs and household size: evidence from New York city

What determines how many adults live in a house? How do people divide themselves up among households? Average household sizes vary substantially, both over time and in the cross-section. In this paper, we describe how a variety of government policies affect living arrangements, intentionally or not. Using data from a survey of households in New York City, we find that these incentives appear to have an impact. Specifically, households receiving these housing and income subsidies are smaller on average (measured by number of adults). The impacts appear to be considerably larger than those that would occur if the programs were lump-sum transfers. Small average household size can be extremely expensive in terms of physical and environmental resources, higher rents, and possibly homelessness. Thus, we encourage policymakers to pay greater heed to the provisions built into various social policies that favor smaller households.     

Household commodity demand and demographics in the Netherlands: a microeconometric analysis

We investigate the effects of demographics, household expenditure and female employment on the allocation of household expenditure to consumer goods. For this purpose we estimate an Almost Ideal Demand System based on Dutch micro data. We find that interactions between household expenditure and demographics are of significant importance in explaining the allocation to consumer goods. As a consequence, consumer goods such as housing and clothing change with demographic characteristics from luxuries to necessities. Furthermore, this implies that budget and price-elasticities cannot be consistently estimated from aggregated data and that equivalence scales are not identified from budget survey data alone. We reject weak separability of consumer goods from female employment. A couple with an employed spouse has a smaller budget share for housing and personal care and a larger budget share for education, recreation and transport and clothing compared to a couple with a non-employed spouse. Received: 12 September 1997/Accepted: 27 February 1998     

An analysis of reproductive behaviour in Canada: results from an intertemporal optimizing model

Results based on a sample of Canadian households challenge the findings of most studies which show significant negative effects of schooling on the fertility of women under the age of 45. This is due to the application of methods to an optimization model which distinguish between those households which have completed their reproductive behaviour from those which have not. Completion status and the desired number of children are used to infer characteristics of the optimal programme which are then employed to derive a likelihood function. Traditional demographic methods have so far not fully utilized the distinction between incomplete and completed households in sample surveys. These methods also lead to the conclusion that completed fertility had increased from its all time low in the nineteen seventies. Received: 9 July 1997/Accepted: 6 June 1998     

Dads, disease, and death: determinants of daughter discrimination

Existing evidence suggests that girls are differentially affected by income shocks and changes in bargaining power. Most studies, however, ignore household production and confound differential opportunity costs with changes in income or bargaining power. I disentangle these determinants of gender discrimination??preferences, income and time allocation??by comparing households with varying degrees of parental involvement. Results indicate that, controlling for household fixed effects, reducing the time available for household production has a disproportionately negative effect on daughters. But, for a transitory income shock, daughters?? education is less income-elastic. Increasing mothers?? bargaining power is most effective in narrowing the gender gap.     

Banking on fewer children: financial intermediation,fertility and economic development

This paper shows that financial intermediation can influence fertility and labor allocation decisions by raising market wages. The increase in wages induces some households to abandon “traditional” labor intensive methods of production managed at the household level and supply labor to “modern” sector firms. Since it is optimal for households in the modern sector to have fewer children, the labor allocation decision leads to lower national fertility. A panel VAR using financial intermediation, fertility and industrial employment share data in 87 countries is estimated. The empirical results show that the data are consistent with the theoretical predictions. Received: 20 October 1997/Accepted: 31 August 1998     

Are Targeted Unconditional Cash Transfers Effective? Evidence from a Poor Region in India

The paper is based on a well-focused and purposive field survey of 200 randomly selected sample households (HHs) from 20 villages of Odisha (the poorest state) in India, provides a critique of present institutional arrangements for delivery of social security measures-in terms of outreach and effectiveness. The exercise shows, on the one hand, the dissonance between below poverty line households and asset/wealth position of households and thus there is strong evidence of inclusion and exclusion errors and on the other, weak targeting efficiency and an important determinant of which seems to be what is called HH social/structural capital.     

Children and the Elderly: Wealth Inequality Among America’s Dependents

Life cycle theory predicts that elderly households have higher levels of wealth than households with children, but these wealth gaps are likely dynamic, responding to changes in labor market conditions, patterns of debt accumulation, and the overall economic context. Using Survey of Consumer Finances data from 1989 through 2013, we compare wealth levels between and within the two groups that make up America’s dependents: the elderly and child households (households with a resident child aged 18 or younger). Over the observed period, the absolute wealth gap between elderly and child households in the United States increased substantially, and diverging trends in wealth accumulation exacerbated preexisting between-group disparities. Widening gaps were particularly pronounced among the least-wealthy elderly and child households. Differential demographic change in marital status and racial composition by subgroup do not explain the widening gap. We also find increasing wealth inequality within child households and the rise of a “parental 1 %.” During a time of overall economic growth, the elderly have been able to maintain or increase their wealth, whereas many of the least-wealthy child households saw precipitous declines. Our findings suggest that many child households may lack sufficient assets to promote the successful flourishing of the next generation.     

The justice of earnings in dual-earner households

Over recent decades, the rise in female labor market participation and the increase in “atypical” employment arrangements have brought about a steady decline in traditional “male breadwinner” households and an increasing number of dual-earner households. Against this backdrop, the present paper investigates how different household contexts—ranging from traditional “male breadwinner” households to those challenging this model through joint contributions to household income—affect household members’ subjective evaluations of the justice of their personal income. In the first step, we derive three criteria used by individuals to evaluate the justice of personal earnings: compensation for services rendered, coverage of basic needs, and the opportunity to earn social approval. In the second step, we apply considerations from household economics and new approaches from gender research to explain why men's and women's evaluations of justice are determined to a considerable degree by the specific situation within their household. The assumptions derived regarding gender-specific patterns in justice attitudes are then tested on longitudinal data from the German Socio-Economic Panel Study (SOEP). The results support our central thesis that dual-earner households both reinforce and undermine gender-specific patterns in the evaluation of personal earnings. These patterns are undermined because women in dual-income households tend to have higher income expectations that challenge the existing gender wage gap. At the same time, gender-specific patterns are reinforced because men evaluate the justice of their personal income in relation to their ability to fulfill traditional gender norms.     

Time? money? both? the allocation of resources to older Parents

We provide estimates of a reduced-form model of the allocation of household time and money resources. We consider four demands for these resources: time spent working, time spent providing care for noncoresident elderly parents, time spent performing housework, and monetary transfers to noncoresident elderly parents. We focus on the effects of wage rates and parental characteristics on the allocation decisions of adult children and their households concerning these four demands. We find that households with individuals earning high wages rely relatively more on cash transfers and relatively less on time transfers than do lower-wage households. We also find evidence consistent with an unmeasured tendency of some families to provide multiple sources of support.     

Dads, disease, and death: determinants of daughter discrimination

Existing evidence suggests that girls are differentially affected by income shocks and changes in bargaining power. Most studies, however, ignore household production and confound differential opportunity costs with changes in income or bargaining power. I disentangle these determinants of gender discrimination—preferences, income and time allocation—by comparing households with varying degrees of parental involvement. Results indicate that, controlling for household fixed effects, reducing the time available for household production has a disproportionately negative effect on daughters. But, for a transitory income shock, daughters’ education is less income-elastic. Increasing mothers’ bargaining power is most effective in narrowing the gender gap.     

Welfare production: Public versus private

Welfare is one of the highest values in modern societies and refers primarily to the living conditions and the perceived life quality of individuals and families. This paper is asking how welfare is generated in society, what are the producers, the products, the production processes, the limits of particular productions, and new innovative “mixes”. After a survey of the literature (theory of social production, well-being accounting, political productivity, social policy intervention), a scheme of four major institutions of welfare production is discussed: markets, bureaucracies, associations, private households. Next, the present dilemmas and the innovative potential of each particular institution and of pair-and triple combinations are briefly explored, e.g. new “corporatist” patterns. Two case studies (“shadow economy”, household production) are investigating the policy question of how private initiatives, the resources of associations and private households, and new combinations of public and private efforts may overcome some of the deadlocks in the present “market failure” and “state failure”.