Family economics review

42 Pages·1991·2.6 MB·English

by  Institute of Home Economics (U.S.)

Historic, Archive Document
Do not assume content reflects current
scientific knowledge, policies, or practices.
t
amily
1991
Economics Vol. 4 No. 4
United States
Department of
Agriculture
Review
Agricultural
Research
Service
The Family Economics Research Group and the Family Economics Review would like to
gratefully acknowledge the reviewers of manuscripts for 1991 issues:
David Arnaudo Frances Magrabi
Office of Child Support Enforcement University of Illinois
U.S. Department of Health and Human Services
Angela Mayers
Jean Bauer Tennessee State University
University of Minnesota
Robert McClelland
Peggy Berger Bureau of Labor Statistics
Colorado State University U.S. Department of Labor
James Blaylock Jacquelyn McCray
Economic Research Service University of Arkansas-Pine Bluff
U.S. Department of Agriculture
Carol Meeks
Sharon Burgess Seiling University of Georgia
Ohio State University
Leonard Norry
Robert Cage Bureau of the Census
Bureau of Labor Statistics U.S. Department of Commerce
U.S. Department of Labor
Joyce M. Pitts
Elizabeth Davis Family Support Administration
University of Nebraska U.S. Department of Health and Human Services
Cecilia Enns William Potts
Human Nutrition Information Service Agricultural Research Service
U.S. Department of Agriculture U.S. Department of Agriculture
Cynthia N. Fletcher Judith J. Putnam
Iowa State University Economic Research Service
U.S. Department of Agriculture
Billie Frazier
University of Maryland Velda Rankin
Extension Service
Thesia Garner
U.S. Department of Agriculture
Bureau of Labor Statistics
U.S. Department of Labor Carolyn C. Rogers
Economic Research Service
Roderick Harrison
U.S. Department of Agriculture
Bureau of the Census
U.S. Department of Commerce Gladys Shelton
North Carolina A&T University
Joanne Holden
Agricultural Research Service Stephanie Shipp
U.S. Department of Agriculture Bureau of Labor Statistics
U.S. Department of Labor
Arlene Holyoak
Oregon State University Jeanne W. Smith
University of California-Davis
Hazel O. Jackson
Ohio State University Marlene Stum
University of Minnesota
Eva Jacobs
Bureau of Labor Statistics Patricia Tengel
U.S. Department of Labor University of Maryland
Helen Jensen Nayda I. Torres
Iowa State University University of Florida
John J. Kennedy Gladys Vaughn
Ohio State University American Home Economics Association
Arthur Kennickell Flora Williams
Federal Reserve Board Purdue University
John Lawler Cathleen Zick
Economic Research Service University of Utah
U.S. Department of Agriculture
For sale by the U.S. Government Printing Office
Superintendent of Documents. Mail Stop: SSOP. Washington. DC 20402-9328
ISBN 0-16-036203-2
Family
Economics
Review
Vol. 4 No. 4
Editor Contents
Joan C. Courtless
Editorial Assistant Features
Jane W. Fleming
2 Economic Status of Two-Parent Families With
Family Economics Review is written and Employed Teens and Young Adults
published each quarter by the Family
Mary Ann Noecker Guadagno
Economics Research Group, Product
Quality and Development Institute,
11 Money Contributions to Religion, Charity, Education,
Agricultural Research Service, United
States Department of Agriculture, and Politics
Washington, DC.
Julia M. Dinkins
The Secretary of Agriculture has deter¬
15 Trends in Savings
mined that the publication of this peri¬
odical is necessary in the transaction of Joan C. Courtless
the public business required by law of
this Department.
Research Summaries
This publication is not copyrighted.
Contents may be reprinted without per¬
mission, but credit to Family Economics 22 Characteristics of People With and Without
Review would be appreciated. Use of Health Care Coverage
commercial or trade names does not
imply approval or constitute endorse¬ 24 Household Wealth and Asset Ownership: 1988
ment by USD A. Family Economics
Review is indexed in the following 26 Who Can Afford to Buy a House?
databases: AGRICOLA, Ageline,
ERIC, Family Resources, and PAIS.
28 Payment of Household Debts
Family Economics Review is for sale by
29 What’s It Worth? Educational Background
the Superintendent of Documents. Sub¬
scription price is $5 per year ($6.25 for and Economic Status
foreign addresses). Send subscription
orders and change of address to Super¬
Regular Items
intendent of Documents, P.O. Box
371954, Pittsburgh, PA 15250-7954.
(See subscription form on p. 31.)
31 Recent Legislation Affecting Families
Suggestions or comments concerning
32 Current Regional Research Project
this publication should be addressed to:
Joan C. Courtless, Editor, Family
Economics Review, Family Economics 33 Data Sources
Research Group, USDA/ARS, Federal
Building, Room 439A, Hyattsville, MD 34 Cost of Food at Home
20782. Telephone [phone].
35 Consumer Prices
36 Index of Articles for 1991
December 1991
Some older children and young
Economic Status of Two-Parent
adults work to help their families
financially. But unlike previous
Families With Employed Teens
generations, most teens and young
adults do not work to keep their
and Young Adults families out of poverty (2). Most of
the income earned by employed
children is spent for their own
needs and activities (9,10,13).
Teenage and young adult earners
By Mary Ann Noecker Guadagno
have generated public interest
Consumer Economist
among social scientists, educators,
Family Economics Research Group
parents, family counselors, policy¬
makers, and those interested in
the economic status of children.
This article examines the economic Hayge (4,5), for example, showed Whereas parents, educators, and
status of two-parent families and the there is an increasing proportion of policymakers have traditionally
earnings contribution of employed
younger wives entering the labor condoned—if not encouraged—
teens and young adults. Using data from
force and an increasing incidence employment by youth, research
the 1989 Consumer Expenditure Survey,
of marital breakup. Greenberger suggests that the social and psycho¬
this study describes and compares two-
parent families including employed and and Steinberg (5) hypothesize that logical costs of youth employment,
nonemployed teens ages 14-17 and increased labor force participation in general, may far outweigh the
young adults ages 18-24. Descriptive by women has served as a role benefits.1
results indicate that 5.7 million families, model for teens and young adults, It is beyond the scope of this
or about 63 percent of all two-parent encouraging them to work. They article to examine why so many
families with an oldest child 14-24 years, found that employed youth fre¬ young people are employed and
had an employed teen or young adult in
quently neglect their education; the consequent social-psychological
1989. About 47 percent of the families
are less able to handle stress, leading impact. This study provides insight
with teens, compared with 80 percent of
to increased alcohol and drug use; into the economic role of youth,
the families with young adults, had an
and, because most are working in relative to the economic status of
employed child. Average annual earn¬
ings by 14- to 17-year-olds were $1,579, suboptimal work environments, their families. Two major questions
or about 5 percent of before-tax family their long-term attitudes about work are addressed: “What are the demo¬
income. Mean annual earnings by 18- to are more cynical than those of their graphic characteristics, income, and
24-year-olds were $7,379, or 16 percent nonemployed counterparts. expenditures of two-parent families
of before-tax family income. Family Nevertheless, more and more with employed teens and young
economic status differed significantly
young people are working either adults versus their counterparts
when teens and young adults worked—
part time or full time (1,2,3). Es¬ with teens and young adults who
as revealed by discriminant analysis.
timates of labor force participation are not working?” and “Are two-
Employed teens were more likely to be
by this group vary widely. As would parent families with child earners
from upper socioeconomic, White
families than were nonemployed teens. be expected, teens tend to work part significantly different from similar
Employed young adults also tended to time after school. Young adults, families without child earners? If
be from upper socioeconomic,home- who traditionally left home after so, what demographic, income, and
owner families, compared with non¬ high school to attend college or expenditure variables best explain
employed young adults. work full time, are more frequently these differences?”
choosing to stay at home with
parents, as they go to college or 'For a discussion of the social-
Xhe Cooperative Extension System work part time (2). psychological costs and benefits of youth
recently made “youth at risk” a This trend in increased youth employment, see Greenberger and
Steinberg (3).
national initiative (15). Changes in employment has been attributed to
the employment patterns of family the expansion of job opportunities,
members are responsible, in part, especially in the service and retail
for the social and economic condi¬ sector; a weakening of the social and
tions placing our Nation’s youth practical constraints on employing
at risk. (Risk refers to childhood youth; and increased materialism
poverty, poor health, physical and among teenagers and young adults (2).
substance abuse, teenage pregnancy,
depression, and suicide.)
2 Family Economics Review
Approach separately from families with young conducted to determine whether
adults (18-24 years old). Families the same 13 demographic variables
Data and Sample
were classified into the above could differentiate between families
Data for this study are from the groups, based on the oldest child’s with young adult earners ages 18-24
interview component of the 1989 age. It is important to note, however, (Group 3: unweighted n=758) and
Consumer Expenditure Survey that earnings from all employed similar families in which young
(CE) (16). Collected by the Bureau children were included in the adults were not employed (Group 4:
of the Census for the Bureau of analyses. Second, multivariate unweighted n=174). For greater
Labor Statistics, CE is a national discriminant analysis was used to statistical precision, a 25-percent
probability sample of about 5,000 determine whether families with random sample of families with
consumer units. Data provide a child earners were significantly young adult earners (selected with a
detailed account of U.S. consumer different from their counterparts random start) was used in dis¬
units’ demographic characteristics, with nonearner children, based criminant analyses to balance the
income, and expenditures. Inter¬ on selected demographic charac¬ sample size between young adult
views are conducted in five consecu¬ teristics, including income and earner and nonearner families
tive quarters using a rotating sample expenditure patterns. Resultant (6,7,14).
design. The 1989 CE had a response significant discriminant functions Demographic variables included:
rate of 86 percent with over 20,000 were interpreted to identify the family size, father’s age, mother’s
responses. variables that best characterized age, father’s education level (high
The final sample consisted of family group differences. school graduate=1/nongraduate=0),
1,920 two-parent families, reflecting Data used in the descriptive mother’s education level (high
sampling restrictions made on the analysis were weighted to represent school graduate=l/nongraduate=0),
basis of family composition, labor the U.S. population of two-parent employment status of father
force characteristics, and complete¬ families with an oldest child be¬ (employed = 1/not employed=0),
ness of income reported. Families tween 14 and 24 years—about 9 mil¬ employment status of mother
with adult children over 25 years lion families. Sixty-three percent of (employed = 1/not employed=0),
old could not be examined because the families had children who were father’s race/origin (White=l/
there were not enough cases. Those employed part or full time. Among minority=0), mother’s race/origin
with parents who were retired or families with children 14-17 years (White=1/minority=0), housing
students (one or both parents) or old, 47 percent had an employed tenure (own=l/rent=0), residence
not living together were deleted child, compared with 80 percent of (urban=l/rural=0), total family
because of the uniqueness of their families with young adults 18-24 before-tax income, and total annual
financial situation. Incomplete years old. expenditures.
income reporters, that is, families In contrast, unweighted data were A third and fourth discriminant
who did not provide a value for used in the discriminant analyses. analysis examined whether families
major sources of income such as Since these analyses are inferential with and without employed teens
wages and salaries, self-employment, in nature, and the precision of in¬ and young adults could be dif¬
or Social Security income, were ference is a function of the number ferentiated on the basis of nine
eliminated from the sample to of cases that are free to contribute expenditure variables: housing,
minimize distortion in income to variance in the data, the use of transportation, food at home,
estimates. unweighted data is appropriate food away from home, clothing,
here. education, retirement, entertain¬
Analysis and Variables
In all, four separate descriptive ment, and other.
A two-part analysis was conducted. discriminant analyses were per¬
First, the demographic charac¬ formed and interpreted using inter¬
teristics, income, and expenditure val level or dichotomous variables.
patterns of families with child The first discriminant analysis inves¬
earners were described and then tigated whether 13 demographic
compared with similar families variables could distinguish between
in which the children were not two-parent families with teen
employed. Families with teens earners ages 14-17 (Group 1:
(14-17 years old) were described unweighted n=474) and those
with teen nonearners ages 14-17
(Group 2: unweighted n=514). A
second discriminant analysis was
1991 Vol. 4 No. 4 3
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Data are for two-parent families who were complete income report2Some child other than the oldest was employed. 3ln traditional families, the father is employed, the mother takes carbut the father is not employed or both parents are not employed. NA = Not applicable.
4
Family Economics Review
Characteristics of Families employed teens to be traditional families with young adult earners to
With Employed and rather than dual-earner families. be traditional families or a family
The parents of teen nonearners type other than dual-earner,
Nonemployed Children
were the same age (early 40’s) as minorities, renting, or living in
Demographic Characteristics their earner counterparts, slightly urban settings.
less educated (although a greater Families With Nonemployed
Table 1 presents the demographic
percentage of mothers were college Teens and Young Adults—Reasons
characteristics of two-parent families
educated), more likely to be for Not Working. Teens and young
with child earners and nonearners
minorities, renting, or living in adults gave similar reasons for not
in 1989.
urban areas. working: student; ill, disabled, un¬
Families With Employed Teens.
Families With Employed Young able to work; could not find work;
Of two-parent families with children
Adults. About 80 percent of the two- homemaker; or doing something
14-17 years old, about 47 percent
parent families with an oldest child else. But the percentage of those
had an employed oldest child.
18-24 years had an employed young reporting a particular reason for
Families with teen earners had
adult. Families with young adult not working varied between teens
4.3 family members, on average,
earners had 3.9 members, on and young adults.
including 1.1 child earner. Most
average, including one young adult For example, about half (53 per¬
(82 percent) of the employed teens
earner. cent) of the teens ages 14-17 were
were from dual-earner families.
Parents with employed young not employed. As would be ex¬
Parents of teen earners tended
adults were most likely to be in pected, almost all (97 percent)
to be middle-aged (early 40’s),
their mid- to late-40’s, employed, nonemployed teens were students.
employed, high school graduates,
high school graduates, White, The other 3 percent indicated they
White, homeowners, and living in
homeowners, or living in urban could not find work or were doing
urban areas. About 43 percent of
areas. Most mothers of young something else.
the mothers were employed full
employed adults were employed In contrast, only about 20 percent
time, and 41 percent worked part
(34 percent full time and 41 percent of the young adults ages 18-24 living
time in paid employment outside
part time), but 25 percent did not at home were not working. Most
the home.
work in paid employment outside nonemployed young adults were
In contrast, families with teens
the home. students (72 percent) (figure 1).
who were not employed were slightly
In contrast, families with young Eleven percent of this older age
smaller, had fewer earners, and
adult nonearners were, on average, group were ill, disabled, or unable
were more likely than families with
slightly larger, more likely than to work; 8 percent reported they
1991 Vol 4 No. 4 5
were doing something else; 4 per¬ Table 2. Two-parent family Income, children’s earnings, and family
cent could not find work; 2 percent expenditures, by age and employment status of oldest child, 1989
were homemakers; and 3 percent
_Age of oldest child_
did not indicate a reason for not
Income and _14 -17 years_18-24 years_
working.
expenditures Employed Not employed Employed Not employed
Children’s Earnings and
Family Income Before-tax income. $48,926 $41,535 $54,031 $45,776
Table 2 presents children’s earn¬ After-tax income. 44,051 38,301 48,484 41,237
ings and average family income Per capita before-tax income 11,378 10,130 13,854 11,444
estimates. In 1989, 2.2 million
Children’s earnings1 . 1,579 0 7,379 0
families with teens and 3.5 million
Oldest child's earnings2 .... 1,443 0 6,618 0
families with young adults had at
least one employed child. Teen
earners worked almost exclusively Expenditures
part time (96 percent). On average,
Total annual expenditures ... $41,292 $36,003 $42,536 $41,781
they earned $1,579 annually, about
Housing. 11,298 10,674 10,483 11,257
$30 a week or $132 each month.
Teen earnings were about 5 percent Transportation. 9,703 6,905 10,351 7,717
of 1989 before-tax family income Food at home . 4,636 4,644 4,792 5,037
(calculated on a family-by-family
Food away from home . 2,010 1,642 2,040 2,090
basis).
Retirement . 4,198 3,675 4,888 4,227
Most young adults also worked
part time but about 28 percent of Clothing. 2,358 2,223 2,266 2,462
this group worked full time. Young Entertainment. 2,343 2,208 2,242 3,475
adults, on average, earned $7,379
Education and reading. 820 816 1,348 1,277
annually or 16 percent of 1989
Other3. 3,926 3,216 4,126 4,240
before-tax family income—about
$142 a week or $615 a month.
1 Based on wage and salary earnings of 80 percent of all children who indicated full- or part-
Children’s earnings, as a percent¬
time employment status, ages 14-24; 20 percent of employed children did not report
age of before-tax family income,
earnings.
varied by family type (figure 2). 2Based on wage and salary earnings of oldest child, ages 14-24; about 80 percent reported
Children in dual-earner families earnings.
3Other includes life insurance, health care, tobacco, alcohol, cash contributions, personal
earned the lowest percentage of
care, and miscellaneous expenses.
family income. In contrast, children
in traditional families (father
employed, mother homemaker) and
families other than dual earner or
Family Expenditures Notably, families with nonemployed
traditional (mother only employed
young adults spent proportionately
or neither parent employed) tended Average annual expenditures
more for entertainment than the
to earn a larger percentage of reported by families with employed
other family types.
family income. and nonemployed teens were
Overall, families with teen
Overall, families with teen earners $41,292 and $36,003, compared with
earners spent about 94 percent of
had lower average family income $42,536 and $41,781 in families with
their after-tax income. In contrast,
than families with young adult employed and nonemployed young
families with employed young
earners because teens earned less, adults (table 2). Expenditure shares
adults spent 88 percent of their
on average, than young adults. for food away from home, clothing,
after-tax income, indicating they
Average annual before-tax income education, and other expenses were
had slightly more savings than those
of families with teen earners was fairly stable across family types. In
with teen earners.
$48,926, compared with $54,031 for contrast, families with employed
families with young adult earners. children spent proportionately
Mean income of families with teen more for transportation and less for
earners was about 91 percent of food at home than comparable
young adult earners’ family income families with nonemployed children.
and 82 percent on a per capita basis.
6 Family Economics Review