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Historic, Archive Document Do not assume content reflects current scientific knowledge, policies, or practices. ECONOMICS REVIEW ECONOMICS 1992 Vol. 5 No. 3 Feature Articles 2 An Overview of Home-Based Work: Editor Results Front a Regional Research Project Joan C. Courtless Marilyn M. Furry and Mark Lino Editorial Assistant Jane W. Fleming 9 Expenditures for Food Away From Home Julia M. Dinkins and M. Dianna Edlow Family Economics Review is written and published each quarter by the 18 Health Care Trends Family Economics Research Group, Nancy E. Schwenk Agricultural Research Service, U.S. Department of Agriculture, Washington, DC. The Secretary of Agriculture has Research Summaries determined that the publication of this periodical is necessary in the transaction of the public business required by law of the Department. 25 Changes in Income, 1984-89 This publication is not copyrighted. 26 Household Use of Financial Services Contents may be reprinted without permission, but credit to Family 28 Family Finances Economics Review would be appreciated.Use of commercial or trade names does not imply approval or constitute endorsement by USDA. Family Economics Review is indexed Regular Items in the following databases: AGRICOLA, Ageline, ERIC, Family Resources, and PAIS. Family Economics Review is for sale 31 Recent Legislation Affecting Families by the Superintendent of Documents. 32 Current Regional Research Project Subscription price is $5 per year ($6.25 for foreign addresses). Send 33 Data Sources subscription orders and change of address to Superintendent of 34 Charts From Federal Data Sources Documents, P.O. Box 371954, 36 Poverty Thresholds Pittsburgh, PA 15250-7954. (See subscription form on p. 39.) 37 Cost of Food at Home Suggestions or comments concerning 38 Consumer Prices this publication should be addressed to: Joan C. Courtless, Editor, Family Economics Review, Family Economics Research Group, USDA/ARS, Federal Building, Room 439A, Hyattsville, MD 20782. Phone (301) 436-8461. Feature Articles An Overview of Home-Based Work: Results From a Regional Research Project By Marilyn M. Furry Assistant Professor The Pennsylvania State University Mark Lino1 Economist Family Economics Research Group This study uses data from a regional research project to provide an overview of the nature of home-based work, characteristics of home-based workers, and home-based workers’ assessment of their work. Most home-based workers (75 percent) owned their own business and 47 percent worked 40 or more hours per week. Home-based workers were a heterogeneous group in regard to occupation, sex, age, education, and presence of children. Most (83 percent) home-based workers were satisfied with their employment. Most planned to continue working at home. Results of this study should give policy¬ makers a better understanding of this growing segment of the labor force. n 20th-century America, regularly scheduled employment. The work and home have been study found that an estimated 17.3 mil¬ two separate aspects of lion people engaged in some nonfarm most people’s lives. A work-at-home, with 1.9 million people growing number of Americans, how¬ engaged exclusively in home-based, ever, have merged the two, resulting nonfarm work. Of persons working in home-based work. Although home- exclusively at home, two-thirds were based work is often viewed as an ideal women. About half were in service work arrangement and a trend of the industries. Mean hours per week future (7,2). few studies have examined worked at home was 32. such employment. Based on a national survey of about A Bureau of Labor Statistics (BLS) 2,500 randomly selected households, study by Horvath (4), using the 1985 a study by LINK Resources estimated Current Population Survey, focused that in 1991,38.4 million people per¬ on people who worked at home. formed income-producing or job-related Work-at-home was defined as any work-at-home. Such work could be part work done at home as part of one’s time or full time or involve the use of one or more of the following: personal 'The authors wish to express their appreciation computer, modem, fax, multiple phone to Diane Masuo of the University of Hawaii- lines (5). Estimates of the number of Honolulu for her help in data analysis. people who worked at home in this Family Economics Review study were much higher than numbers Data served as the only office from which reported in the BLS study because of a this work was arranged. broader definition of work-at-home. In The NE-167 Regional Research Project, the BLS study, people were included “At-Home-Income-Generation: Impact Telephone interviews were conducted only if work-at-home was part of their on Management, Productivity, and with 899 households with a home-based regularly scheduled workweek. Stability in Rural/Urban Families," was worker in March and April 1989. Data supported by the Agricultural Experi¬ were collected on home-based workers' Of all home workers in the LINK ment Stations of Hawaii, Iowa, Michigan, socioeconomic characteristics, manage¬ Resources study, 31 percent were self- Lincoln University (Missouri), New ment behavior and strategies, and the employed. Fifty-four percent were York. Ohio, Pennsylvania, Utah, and relationship between work and family. male, and 56 percent had a college Vermont, and the U.S. Department of Weights were devised to account for the degree. Average age was 40 years, and Agriculture. populations in each of the nine States. mean hours per week worked at home Results reported in this study are based was 17. Eighty percent were married, To identify home-based workers, a on weighted data. A value for income and 51 percent had children under age random sample of households was was imputed in all cases where it was 18 in the household; 23 percent had a selected from telephone listings in each not reported. child under age 6. Average household of the nine States (6). Screening calls income was $50,400. were made in February 1989 by the Iowa Because of varying definitions of State University Statistical Laboratory work-at-home, the results of this study Heck examined the prevalence of to find households with at least one are not comparable with those of the working at home using a sample of worker based in the home. For each LINK Resources study, which does not 6,744 people from the 1984 Panel Study State, the goal was 100 completed focus solely on home-based workers but of Income Dynamics (3). The study interviews. A home-based worker was includes all people who work at home found that 5 percent of workers were defined as a person age 18 or older who at least part of the time. Results reported engaged in home-based employment, had worked 6 or more hours per week here are more comparable with the BLS which was defined as situations in or a minimum of 312 hours during the analysis on people who worked exclu¬ which the worker did not travel to work previous 12 months. Although the home- sively at home and the Heck study, or the amount of travel time varied (such based worker could have performed some which examined people who did not as when workers travel as part of their part of the job outside the home, the home commute to work on a regular basis. jobs and work out of home offices). Home-based workers were more likely to be white, have a lower level of family income, have a high school diploma or Occupations of home-based workers: more, and work shorter hours than other workers. Older people, those without Marketing and sales - door-to-door or home salespeople, real estate and children, those with young children insurance agents, and mail order businesses. under age 6, self-employed workers, Contracting - carpenters, painters, roofers, masons, and electricians. and farmers were also more likely to be Mechanical and transportation - plumbers, locksmiths, radio and television involved in home-based employment repair people, and auto mechanics. than others. Services - beauticians, hairdressers, pet groomers, fitness instructors, and elder Although these studies provided infor¬ and child-care providers. mation on some employment located in Crafts and arts - potters, clothing designers, jewelrymakers, weavers, and the home, more needs to be known teachers of these crafts and arts. about home-based workers that either Professional and technical - lawyers, therapists, engineers, accountants, own their own business or are paid by authors, teachers, architects, and consultants. an outside employer. Clerical and administrative support - secretaries, bookkeepers, data processors, and tax preparers. Management - real estate managers and special events coordinators. Agricultural products and sales - sellers of flowers, fruits, and vegetables. 1992 Vol.SNo. 3 3 Nature of Home-Based Work Table 1. Nature of home-based work Of the home-based workers in the nine Own Paid by States, 75 percent had their own business Characteristic All business employer and the remaining workers were paid by an outside employer (table 1). There Percentage of home-based workers 100 75 25 were occupational differences between Percent home-based business owners and paid workers. (See box, p. 3, for example of Occupation each occupation.) Of workers paid by Marketing/sales 23 15 53 an outside employer, 53 percent were Contracting 15 18 5 engaged in marketing or sales. Such Mechanical/transportation 13 16 6 work typically involved a person selling Services 12 15 3 an employer's products or services door Crafts/arts 12 15 2 to door, on the telephone, or from the Professional/technical 12 11 13 home. Professional/technical and clerical/ Clerical/administrative support 6 4 11 administrative support work were the Management 4 3 5 next most common occupations (13 per¬ Agricultural products/sales 3 3 2 cent and I 1 percent) of paid workers. Hours worked per week No occupational category dominated for Less than 20 35 37 29 home-based business owners. Eighteen 20 - 29 10 11 8 percent were contractors, such as car¬ 30 - 39 8 9 5 penters or electricians, and 16 percent 40 or more 47 43 58 did mechanical or transportation work. Fifteen percent each did sales or market¬ Years in home-based work ing work; service work, which includes Less than 5 39 36 47 home child care; and work involving 5-9 24 25 22 crafts or art. These occupations of 10- 14 16 17 14 home-based workers differ from those 15 or more 21 22 17 in the BLS study because of dissimilar classification of occupation; the BLS Additional employment outside home study included many professional Yes 26 28 19 occupations under services. No 74 72 81 Assistance with work1 The average number of hours worked Yes 56 61 41 per week in home-based work was 36 No 44 39 59 for business owners and 39 for paid workers. This represents the average for Tor business owners, includes household members and others; for paid workers, includes only household 50 weeks per year; some people may members. work more hours per week for fewer weeks per year. Average hours worked per week was somewhat skewed. Twenty-nine percent of paid workers In addition to work-at-home, many A majority (56 percent) of home-based and 37 percent of business owners home-based workers were employed in workers had paid or nonpaid assistance worked less than 20 hours per week in other jobs outside the home. A higher with their work. Data collected on home-based employment, yet 58 per¬ proportion of business owners than paid assistance with work included both cent of paid workers and 43 percent workers were employed outside the household members and nonmembers of business owners worked more than home (28 percent vs. 19 percent). It for business owners but only household 40 hours per week in home-based appears that home-based work is a members for paid workers. A larger employment. The average number of years complement to outside work for some percentage of business owners than paid in home-based employment was 9 for rather than an alternative. workers had assistance with their work business owners and 8 for paid workers. (61 percent vs. 41 percent). 4 Family Economics Review Of business owners receiving assistance Table 2. Characteristics of home-based workers with their work, 70 percent had at least one paid employee; 24 percent had four Own Paid by or more. Sixty-five percent of business Characteristic All business employer owners also had help with their business from people who were not reimbursed. Percent This uncompensated assistance was Sex most often from family members. Of Male 58 58 57 paid workers receiving assistance from Female 42 42 43 household members, this help was un¬ compensated in 73 percent of house¬ Age holds; in only 10 percent of households Under 30 10 9 11 was it always compensated. 30 - 39 36 36 38 40-49 24 22 28 Characteristics of Home-Based 50 - 59 18 21 11 Workers 60 and over 12 12 12 The majority (58 percent) of home- Education based workers were male (table 2). Elementary or some high school 6 7 2 This differs from the BLS study that High school diploma 33 35 27 found the majority of people working Some college 30 30 31 exclusively at home were female. The College degree 20 18 27 difference may reflect the earlier data Some graduate school 11 10 13 (1985) used in the BLS study. In recent years, there has been a trend for more Marital status men than women to enter home-based Married 85 85 84 employment (5). Almost no difference Never married 15 15 16 in gender existed between home-based Number of children workers that owned their own business and those paid by an outside employer. 0 46 46 45 1 18 16 21 Average age of home-based workers 2 22 22 23 was 44; 30 percent were over age 50. 3 or more 14 16 11 Horvath hypothesized that work-at-home Children under age 6 may be an attractive option for older Present 28 27 32 people who may find a daily commute Not present 72 73 68 very tiring (4). Workers who owned their own business were older than those Place of residence paid by an outside employer. Thirty- Town or city over 2,500 54 52 58 three percent of business owners were Town or city under 2,500 19 20 18 age 50 or over, compared with 23 Rural nonfarm 20 20 19 percent of those paid by an outside Farm 7 8 5 employer. Most home-based workers had a high school diploma. A large proportion percent, respectively, had a college home-based workers had no children in (31 percent) had a college degree. Heck degree. the home, and 72 percent did not have also found that education was positively children under age 6 in the home. related to the probability of home-based Regarding marital status, 85 percent Eighteen percent had one child, and employment. Home-based workers paid of home-based workers were married. 14 percent had three or more children. by an outside employer had a higher Although home-based work is often Heck found that not having children level of education than those owning viewed as an ideal way to manage was positively related to the probability their own business: 40 percent and 28 employment and family, 46 percent of of home-based employment. 1992 Vol. 5 No. 3 5 Figure 1. Net before-tax income from home-based work Percent $5,000-9,999 $15,000-19,999 $25,000-29,999 |2| Own business [ Paid by employer A town or city with a population over Assessment of Home-Based the time-money relationship for such 2,500 was the place of residence for a Work work, a higher percentage of business majority (54 percent) of home-based owners than paid workers received workers; paid workers were more likely Seventy-six percent of home-based “a lot” of satisfaction from home-based than business owners to live in a town workers thought they made adequate or employment (85 percent vs. 76 percent). or city with a population over 2,500. good money for the time spent in such Seven percent of home-based workers work. Six percent lost money on their Thirty-four percent of home-based lived on a farm. Some of the home- home-based work during the previous workers expected their work to get based work of these people may involve year. People paid by an outside em¬ better, and 7 percent expected it to get farm produce. ployer were more positive in terms of worse. For the majority (59 percent) of the time-money relationship than busi¬ people, home-based work was expected Net before-tax income from home-based ness owners; 86 percent of paid workers to stay the same. A higher proportion of work was higher for people paid by an thought they made adequate or good business owners than paid workers outside employer than for business money for the time spent in home-based expected their work to get worse. Most owners (figure 1). For paid workers, work, compared with 72 percent of home-based workers were optimistic income from home-based work business owners (table 3). This is not about their future income from such averaged $24,400 with 44 percent surprising because paid workers received work. Fifty-nine percent expected their having a net income of $30,000 and a higher income from home-based income to increase in the next 3 years; over. For business owners, income from employment than business owners. 17 percent thought it would decrease, home-based work averaged $15,700 and a small proportion of these people with 14 percent having a net income of Most (83 percent) home-based workers were thinking of quitting their home- $30,000 and over. indicated they received "a lot” of based employment because of this. satisfaction from their work, whereas There was little difference in direction 5 percent stated they received “a little of expected income from home-based or none.” Although business owners work between business owners and earned less income from home-based those paid by an outside employer. work and were less positive in terms of 6 Family Economics Review