The Rise of Single-Person Households and the Macroeconomic Consequences

Abstract

The number of single-person households in the U.S. has steadily risen since 1960. We provide a dynamic general equilibrium model to investigate the impact of this change on aggregate savings and labor supply. Our analysis indicates that single individuals tend to save and work more than married ones with the same economic characteristics. Importantly, this finding at the individual level extends to the aggregate level: both aggregate savings and labor supply increase as the share of single-person households increases, for which the general equilibrium effect plays a crucial role.