Wives' Labor Force Behavior and Family Consumption Patterns

Abstract

In 1940 the labor force participation rate for married women, husband present, was 14 percent. By 1970 it had increased 26 percentage points to 40 percent. The supply and demand variables associated with this increase have been widely investigated. However, there has been ve'ry little research on the economic effects of wives' labor force participation. (See R. Agarwala and J. Drinkwater, Margaret Carroll, Robert Holbrook and Frank Stafford, Lucy Mallan and Jacob Mincer.) This paper analyzes two economic effects: the effect on the ratio of consumption to income (CIY) and the effect on the ratio of durable goods purchases to income (DurlY). The primary question addressed is: Controlling for total family income and several other variables, what are the differences (if any) in the ratios of CIY and DurlY for working-wife (W-W) and nonworking wife (N-W-W) families? Looked at in another way, the question may be rephrased: How do W-W families use wives' income?