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Changes in the Consumption, Income, and Well-Being of Single Mother Headed Families

Author

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  • Bruce D. Meyer
  • James X. Sullivan

Abstract

We investigate well-being changes for single mother headed families targeted by recent tax and welfare reforms. Measured income changes sharply differ from consumption changes. We examine disaggregated consumption, time use, and health insurance coverage. Increases in housing and transportation spending mostly account for the rise in consumption in the bottom quintiles. We find modest improvement in housing quality, but the evidence is less strong at the very bottom. The consumption of nonmarket time for those in the bottom half of the consumption distribution falls sharply, indicating a loss in utility for those families if nonmarket time is valued above $3 per hour. (JEL D12, I31, I32, J12, J16)

Suggested Citation

  • Bruce D. Meyer & James X. Sullivan, 2008. "Changes in the Consumption, Income, and Well-Being of Single Mother Headed Families," American Economic Review, American Economic Association, vol. 98(5), pages 2221-2241, December.
  • Handle: RePEc:aea:aecrev:v:98:y:2008:i:5:p:2221-41
    Note: DOI: 10.1257/aer.98.5.2221
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    Citations

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    Cited by:

    1. Zabel, Cordula, 2013. "Effects of participating in skill training and workfare on employment entries for lone mothers receiving means-tested benefits in Germany," IAB Discussion Paper 201303, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Kory Kroft & Kucko Kavan & Etienne Lehmann & Johannes Schmieder, 2015. "Optimal Income Taxation with Unemployment and Wage Responses: A Sufficient Statistics Approach," Working Papers hal-01292126, HAL.
    3. Bruce D. Meyer & James X. Sullivan, 2009. "Five Decades of Consumption and Income Poverty," NBER Working Papers 14827, National Bureau of Economic Research, Inc.
    4. Marianne P. Bitler & Hilary W. Hoynes, 2010. "The State of Social Safety Net in the Post-Welfare Reform Era," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(2 (Fall)), pages 71-147.
    5. Kim, Jiyoon, 2016. "Do SNAP participants expand non-food spending when they receive more SNAP Benefits?—Evidence from the 2009 SNAP benefits increase," Food Policy, Elsevier, vol. 65(C), pages 9-20.
    6. Ifcher John, 2011. "The Happiness of Single Mothers after Welfare Reform," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-29, September.
    7. Michael Clemens & Erwin Tiongson, 2012. "Split Decisions: Family finance when a policy discontinuity allocates overseas work," CReAM Discussion Paper Series 1234, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    8. Ayala, Luis & Rodríguez, Magdalena, 2013. "Health-related effects of welfare-to-work policies," Social Science & Medicine, Elsevier, vol. 93(C), pages 103-112.
    9. Xu, Yan, 2017. "Essays on preference formation and home production," Other publications TiSEM b028fd7e-53ba-4ff6-97eb-4, Tilburg University, School of Economics and Management.
    10. Adam Bee & Bruce D. Meyer & James X. Sullivan, 2013. "The Validity of Consumption Data: Are the Consumer Expenditure Interview and Diary Surveys Informative?," NBER Chapters,in: Improving the Measurement of Consumer Expenditures, pages 204-240 National Bureau of Economic Research, Inc.
    11. Hernaes, Øystein, 2018. "Distributional Effects of Welfare Reform for Young Adults: An Unconditional Quantile Regression Approach," IZA Discussion Papers 11340, Institute for the Study of Labor (IZA).
    12. Gelber, Alexander M. & Mitchell, Joshua W., 2009. "Taxes and Time Allocation: Evidence from Single Women," MPRA Paper 19148, University Library of Munich, Germany.
    13. Harley Frazis & Jay Stewart, 2012. "How to Think about Time-Use Data: What Inferences Can We Make about Long- and Short-Run Time Use from Time Diaries?," Annals of Economics and Statistics, GENES, issue 105-106, pages 231-245.
    14. Marianne Bitler & Hilary W. Hoynes, 2010. "The State of the Safety Net in the Post-Welfare Reform Era," NBER Working Papers 16504, National Bureau of Economic Research, Inc.
    15. Stefano Visintin & Kea Tijdens & Stephanie Steinmetz & Pablo de Pedraza, 2015. "Task implementation heterogeneity and wage dispersion," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-24, December.
    16. Aditi Bhattacharyya & Daisy Das & Arkadipta Ghosh, 2017. "Electrification and Welfare of Poor Households in Rural India," Working Papers 1702, Sam Houston State University, Department of Economics and International Business.
    17. Gao, Qin & Zhai, Fuhua & Yang, Sui & Li, Shi, 2014. "Does Welfare Enable Family Expenditures on Human Capital? Evidence from China," World Development, Elsevier, vol. 64(C), pages 219-231.
    18. Yamada, Ken, 2016. "Tracing the impact of large minimum wage changes on household welfare in Indonesia," European Economic Review, Elsevier, vol. 87(C), pages 287-303.
    19. Mazzolari, Francesca & Ragusa, Giuseppe, 2012. "Time Limits: The Effects on Welfare Use and Other Consumption-Smoothing Mechanisms," IZA Discussion Papers 6993, Institute for the Study of Labor (IZA).
    20. Newman, Sandra J. & Holupka, C. Scott, 2014. "Housing affordability and investments in children," Journal of Housing Economics, Elsevier, vol. 24(C), pages 89-100.
    21. Coley, Rebekah Levine & Sims, Jacqueline & Votruba-Drzal, Elizabeth, 2016. "Family expenditures supporting children across income and urbanicity strata," Children and Youth Services Review, Elsevier, vol. 70(C), pages 129-142.
    22. Christian Raschke, 2012. "Food stamps and the time cost of food preparation," Review of Economics of the Household, Springer, vol. 10(2), pages 259-275, June.
    23. Lingxin Hao & Wei-Jun Yeung, 2015. "Parental Spending on School-Age Children: Structural Stratification and Parental Expectation," Demography, Springer;Population Association of America (PAA), vol. 52(3), pages 835-860, June.
    24. Alessandra Michelangeli & Eugenio Peluso & Alain Trannoy, 2011. "Detecting a change in wealth concentration without the knowledge of the wealth distribution," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(3), pages 373-391, September.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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