Welfare Sharing Within Households: Identification from Subjective Well-being Data and the Collective Model of Labor Supply

The paper proposed a novel approach to identifying intra-household allocations in households with two decision-makers. We addressed the issue by using the collective model of labor supply. Most empirical studies based on the collective approach were restricted to the identification of the sharing rule guiding individual allocations up to a constant. We suggested using individual welfare satisfaction data as an additional source of identification. An empirical example was given using the Russian Longitudinal Monitoring Survey. The sharing rule was found to be related to the spouses’ wage and age differences and number of children. Sharing varied with the level of household income: In low-income households, sharing was equal; in middle (high) income households men held a slight (strong) advantage.     

Changes in financial status influencing level of satisfaction in households

This study explores the impact of changes in family financial status over a four year period on level of satisfaction with various aspects of household finances. Data were collected through personal interviews with 123 families in 1982 and 1986. Information was obtained on household income, assets, liabilities, and on the satisfaction of the money managers with seven aspects of household finances. Two-tail pairedt-tests were used to compare differences in financial and satisfaction variables between the two time periods. Regression analyses were applied to ascertain factors affecting the satisfaction of the money managers. The financial status of households improved during the 4 year period as reflected by net worth. The mean net worth, with and without real estate, increased significantly during this time period. In spite of this improvement, money managers are less satisfied with various aspects of their household finances.This research was supported by the Iowa Agriculture and Home Economics Experiment Station Project No. 2773 (Journal Paper No. J-13098).Tahira K. Hira is a Professor and Alyce M. Fanslow is a Distinguished Professor in the College of Family and Consumer Sciences; Patricia Titus is an Instructor in the College of Education; all are at Iowa State University, Ames, IA 50011-1120. Dr. Hira's research interests include consumer bankruptcies and various aspects of household economic well-being Dr. Fanslow's and Dr. Titus' research interests include competencies of household money managers.     

Family labor supply,taxation and saving in an imperfect capital market

This paper combines income and expenditure with time use data to provide a unique picture of the labor supply, household production, saving and consumption decisions of two-adult households over a life cycle defined in terms of the presence and ages of children. The study also draws on data for household borrowing and lending, direct and indirect benefits and taxes to calibrate a “family” life cycle model at the core of which is the hypothesis that households face a borrowing interest rate that rises with the amount of non-collateral based borrowing. The household members jointly choose time paths of time use, consumption and saving over their life cycle in the face of this capital market imperfection. Importantly, households are shown to differ significantly in their saving behavior in a way that depends on secondary earner labor supply, with a strong positive association between saving and the income of the second earner. The results differ sharply from those of the existing literature.     

Beyond Oaxaca–Blinder: Accounting for differences in household income distributions

This paper develops a method to decompose differences across distributions of household income, based on counterfactual distributions that ‘lie between’ the actually observed distributions. Our approach decomposes differences between any two income distributions (or functionals such as inequality or poverty measures) into shares due to price effects; occupational structure effects; and endowment effects. Comparing the household income distributions of the USA and Brazil in 1999, we find that most of Brazil’s excess inequality (of 13 Gini points) is accounted for by underlying inequalities in the distributions of education and of non-labor income, notably pensions (between four and six Gini points each). Steeper returns to education in Brazil also make an important contribution (of two to five points). Differences in occupational structure and in racial and demographic composition are much less important. An erratum to this article can be found at     

The Role of Household Social Organization in the Structure of Rural Economies: Comparing Forest Resource Dependent and Agriculturally Dependent Regions in Russia

Sociologists have examined how structural economic change affects household social organization and generation of household income from different sources. The introduction of elements of a market economy into rural Russia in the early 1990s provides a unique opportunity to examine these relationships. Much of the work on this topic, however, has been conducted in black earth zone, agriculturally dependent regions. Less attention has been given to non‐black‐earth zone, forest resource dependent regions. This article addresses this limitation by comparing the relationships between household income generation strategies and household social organization in a 2009 survey of villages in three forest resource dependent regions in northwest Russia with findings from a 2006 survey of households in nine agricultural regions of Russia. Income generated from enterprises based on household social organization—household labor and social helping networks—is substantially greater in agriculturally dependent than in forest resource dependent regions. We discuss the implications of these findings for understanding intranational regional differences in the relationship between economic systems, household social organization, and rural household economies as well as the obstacles facing policymakers and environmentalists who attempt to shift household income generation strategies away from an environmentally harmful lumber industry to income generation activities that are less harmful to the environment.     

Preserving dominance relations through disaggregation: the evil and the saint

This article investigates the circumstances in which stochastic dominance relations at any finite degree at the household level can be assumed to be preserved at the individual level. We find necessary and sufficient conditions on the common sharing function adopted by households to divide the cake among a “strong” and a “weak” individual. The sharing function which maps the household income into the outcome of the weak individual must belong to the class of utility functions which supports the stochastic order. In addition, the household must follow a compensating rule, meaning that the share of resources devoted to the weak individual increases with household income. Applications to fiscal federalism are also proposed. “All inequality is a source of evil - for by the inferior more is lost in the account of happiness than is gained by the superior” J. Bentham, First Principle preparatory to Constitutional Code, 1822.      

Household wealth and the measurement of economic well-being in the United States

We analyze the level and distribution of economic well-being in the United States during the 1980s and 1990s based on the standard measure of money income and a measure in which income from wealth is calculated as the sum of lifetime annuity from nonhome wealth and imputed rental-equivalent for owner-occupied homes. Over the 1982–2000 period, median well-being increases faster when these adjustments are made than when standard money income is used. This adjustment also widens the income gap between African-Americans and whites but increases the relative well-being of the elderly. Adding imputed rent and annuities from household wealth to household income considerably increases measured inequality and the share of income from wealth in inequality. However, both measures show about the same rise in inequality over the period. We also find an increasing share of wage and salary income in our expanded definition of income among the richest 1% over the period but do not find that the “working rich” have largely replaced rentiers at the top of the economic ladder.      

The economies of scale of living together and how they are shared: estimates based on a collective household model

How large are the economies of scale of living together? And how do partners share their resources? The first question is usually answered by equivalence scales which assume equal sharing of resources within the household. Recent evidence based on collective household models rejects this equal sharing assumption. This paper uses data on financial satisfaction to simultaneously estimate the sharing rule and the economies of scale in a collective household model. The estimates indicate substantial scale economies of living together. Furthermore, wives receive on average almost 50 % of household resources, but the estimated shares vary between 30 and 60 %. Female resource shares increase with the ratio of female to male wages. Consumption inequality is underestimated by 16 % if unequal sharing is ignored.     

Loss Aversion and Saving Behavior: Evidence from the 2007 U.S. Survey of Consumer Finances

This study uses data from the 2007 Survey of Consumer Finances to examine household saving behavior based on the two-period model of consumption/saving presented by Bowman et al. (Econ Behav Organ 38:155–178, 1999). The main focus of the model is the existence of an asymmetry in saving behavior in response to positive and negative adjustments in income. The results of the logistic regression analysis support the existence of loss aversion at the household level, where having income below the household’s reference level significantly decreases the likelihood of saving, but having income above the household’s reference level does not have a significant effect on the likelihood of saving.     

Unpacking Within‐Household Gender Differences in Partners' Subjective Benefits From Household Income

The authors examine how contributions to household resources, indicated by employment status, influence satisfaction with household income (SWHI) for members of male/female couples. They take changes in SWHI, which may differ within couples, to indicate changes in perceived benefits from their common household income, benefits that can go beyond individual consumption. Using data from the British Household Panel Survey for 2,396 couples from 1996 to 2007, three gender effects are identified. First, men predominate in making the type of contribution that most positively influences SWHI, namely, full‐time employment. Second, the effect of contributions depends on the gender of the contributor, with men's employment being more influential than women's. Third, within couples, making the more influential contribution, as men tend to do, leads to relatively greater SWHI. The authors conclude that gender asymmetry in contributions made to household resources is one way in which gender inequalities invade and inhabit households.     

Household Income and Trajectories of Marital Satisfaction in Early Marriage

Are the marriages of lower income couples less satisfying than the marriages of more affluent couples? To address this question, we compared trajectories of marital satisfaction among couples with a wide range of household incomes. The marital satisfaction of 862 Black, White, and Latino newlywed spouses (N = 431 couples) was assessed five times, each 9 months apart, during the first 4 years of marriage. Lower income couples did not have less satisfying marriages on average, nor did their satisfaction decline more steeply on average. They did, however, experience (a) significantly greater fluctuations in marital satisfaction across assessments and (b) significantly more variability between husbands and wives. If efforts to support the marriages of low‐income couples are to address the unique characteristics of their marital development, these findings suggest that efforts to stabilize their marriages may be more effective than efforts to improve their satisfaction alone.     

Household job search: A theoretical and empirical model

This article links the literature on family decision making and the economics of job search by examining job search by an unemployed individual within a household context. A theoretical model was developed which demonstrates the interdependence of the utility of household members when one is searching for work. The costs of search are borne by all household members while the benefits are captured in the searcher's expected future wage. A reservation wage was shown to be determined by household financing options, and the perception of relevant labor market parameters. An empirical model of the reservation wage for a sample of unemployment insurance recipients was estimated using two-stage least squares. Results, reported for male and female subgroups, support the hypotheses derived from the household job search model. In particular, the reservation wage was shown to depend on unemployment duration, labor market conditions, increased labor force participation of other household members, use of household assets to finance search, existence of dependents, and unemployment insurance benefits.     

On the underestimation of migration’s income and poverty impact

In estimating the impact of migration on income and poverty, most existing studies have overlooked the fact that migration changes the size of the household. The ‘corrected’ impact that accounts for changes in household size is presented analytically and is estimated on the basis of data from nationally representative household surveys in Albania and Ghana. The analysis considers three poverty measures and four groups of migrant households: those with internal, international, internal and international, and internal and/or international migrants. The ratio of the corrected to the uncorrected impact on per capita income for Ghana (Albania) averages from 2.7 to 4.5 (2.5–3.8), and the ratio for the poverty impact averages from 2.6 to 4.4 (2.1–6.4). Thus, abstracting from changes in household size may result in a substantial underestimate of the impact of migration on income and poverty.

From Soviets to oligarchs: inequality and property in Russia 1905-2016

This paper combines national accounts, survey, wealth and fiscal data (including recently released tax data on high-income taxpayers) in order to provide consistent series on the accumulation and distribution of income and wealth in Russia from the Soviet period until the present day. We find that official survey-based measures vastly under-estimate the rise of inequality since 1990. According to our benchmark estimates, top income shares are now similar to (or higher than) the levels observed in the United States. We also find that inequality has increased substantially more in Russia than in China and other ex-communist countries in Eastern Europe. We relate this finding to the specific transition strategy followed in Russia. According to our benchmark estimates, the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia.     

The effects of perceived locus of control and perceived income adequacy on satisfaction with financial status of rural households

The purpose of this study is to examine the relationships among selected socioeconomic variables — perceived locus of control, perceived income adequacy, and satisfaction with financial status. Results of the study indicate that age, household income, household net worth, perceived locus of control, and perceived income adequacy are significantly related to satisfaction with financial status. Household income and household net worth have indirect effects on satisfaction through perceived locus of control and perceived income adequacy. Perceived locus of control also has an indirect effect on satisfaction through perceived income adequacy. These findings suggest that counselors and educators should emphasize the importance of perceptions of income adequacy and control over financial aspect in their courses and programs.Journal Paper No. J-14499 of the Iowa Agriculture and Home Economics Experiment Station, Ames, Iowa. Project No. 2809.His research interests include consumer credit and family resource management. He received his Ph.D. from Iowa State University in 1993.Her research interests include family financial management and consumer bankruptcy. She received her Ph.D. from the University of Missouri.     

Resident and Family Perspectives on Assisted Living

Abstract

This research describes and compares the relative importance residents and family members place on attributes of the environment, the programs, and the policies of assisted living; describes their satisfaction with these features; and identifies factors associated with congruence between residents' and family members' ratings of importance and satisfaction. Both residents and their family members had high importance and satisfaction ratings. Family members gave the assisted living setting lower satisfaction ratings on all features than did residents. Congruence ranged from 34% to 71% for importance items and from 29% to 63% for satisfaction. Female residents, affectionate family relationships, and residing in an AL owned by a chain were positively associated with congruence on importance items, while resident and family education, resident income, and family involvement were negatively associated with congruence on importance items. For congruence on satisfaction items, having an affectionate relationship was positively associated and higher ADL dependency, more family involvement at the facility, and family members who viewed the facility as a safe place were negatively associated with congruence. This study makes a major stride forward because cognitively intact residents' perspectives are compared and contrasted with their own family members' perspectives, thus showing that residents and family members are two distinct groups, each with a unique set of preferences.     

Resident and family perspectives on assisted living

This research describes and compares the relative importance residents and family members place on attributes of the environment, the programs, and the policies of assisted living; describes their satisfaction with these features; and identifies factors associated with congruence between residents' and family members' ratings of importance and satisfaction. Both residents and their family members had high importance and satisfaction ratings. Family members gave the assisted living setting lower satisfaction ratings on all features than did residents. Congruence ranged from 34% to 71% for importance items and from 29% to 63% for satisfaction. Female residents, affectionate family relationships, and residing in an AL owned by a chain were positively associated with congruence on importance items, while resident and family education, resident income, and family involvement were negatively associated with congruence on importance items. For congruence on satisfaction items, having an affectionate relationship was positively associated and higher ADL dependency, more family involvement at the facility, and family members who viewed the facility as a safe place were negatively associated with congruence. This study makes a major stride forward because cognitively intact residents' perspectives are compared and contrasted with their own family members' perspectives, thus showing that residents and family members are two distinct groups, each with a unique set of preferences.     

As the Twig Is Bent: Children Reared in Feminist Households

This is a study of children in families in which both the responsibility for income production and the household division of labor is actually post-gendered. Our data come from a larger study of privileged white parents who intentionally organize their households fairly, sharing housework, child care, and emotion work. These parents deconstruct gender not only by encouraging their daughters and sons to develop free from stereotypes but also by modeling such behavior in their own social roles. The data reported here are based on interviews with the children themselves and home observations. We have drawn two main conclusions. First, children do seem to adopt, uniformly, their parent's non-sexist attitudes but then they must negotiate serious inconsistencies between their beliefs and their lived experiences with peers. They resolve this with a dichotomy: men and women are similar and equal, but boys and girls are different and unequal Second, personal identities seem to be forged more from lived experiences than from ideology.     

The impact of macroeconomic conditions on income inequality

This paper analyzes the relationship between macroeconomic factors and the income distribution using data on equivalized disposable household income from the United Kingdom for 1961–99. We argue in favour of fitting a parametric functional form to the income distribution for each year, and then modeling the time series of model parameters in terms of the macroeconomic factors, as this better allows us to take into account non-stationarity in the time series. Estimates from models that relate income distribution parameters to cyclical variables in first differences (to account for non-stationarity) suggest that neither inflation nor unemployment have significant effects on income inequality. Compared to the commonly-used method of modelling the income shares directly, our approach indicates that there was no clear cut relationship between macroeconomic factors and the UK income distribution during the last third of the twentieth century.     

Lifestyle Options and Economic Strategies: Subsistence Activities in the Mississippi Delta1

Abstract "Subsistence" and "informal economy" are contrasted in their utility as sociological concepts and their ability to explain a variety of activities in two rural Mississippi Delta communities. Literature on subsistence stresses that the desired outcome of participation is not an increase in income but the social rewards of participation itself. Two underlying dimensions of participation in these activities are documented through the literature and through a confirmatory factor analysis of empirical data: life-style choice and economic strategy. These were constructed into indexes and examined individually and in combination as dependent variables using regressors at the community, household, and individual levels. Community ties were weakly associated with participation in such activities. Whites and those with higher incomes participated more in lifestyle choice oriented activities. Participation in general was statistically related to households needing less weekly income and being of larger size. Potential connections with persistent rural poverty are discussed.