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American Economic Review Vol. 98 No. 5 2008

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

Bruce D. Meyer1; James X. Sullivan2

1 Harris School of Public Policy Studies, University of Chicago, 1155 E. 60th Street, Chicago, IL 60637. · 2 University of Notre Dame, Department of Economics and Econometrics, 447 Flanner Hall, Notre Dame, IN 46556.

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.

DOI
10.1257/aer.98.5.2221
Volume
98
Issue
5
Pages
2221-2241
Language
en
Sources
openalex bibtex:phds-export.bib crossref

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