Household production time and inequality in material living standards in the U.S., 1965–2018

Abstract

We study how unpaid household production shapes trends in inequality in material living standards in the U.S. in the last five decades. We construct extended income and consumption measures that add the imputed value of household production to standard market concepts. Extended income and consumption are consistently more equal than their market counterparts. The imputed value of time devoted to household production has fallen considerably, with proportionately larger impacts on money-poor households. Inequality in extended measures has therefore risen more than for market income and consumption. In other words, the degree to which household production buffers inequality in market resources has fallen over time. This analysis applies a lower-bound replacement cost value to hours of time reported in household production and is robust to the use of different valuation and equivalence scales.