Friday, May 4, 2012

Inequality of Leisure

Inequality of incomes have risen in recent decades. Orazio Attanasio, Erik Hurst, and
Luigi Pistaferri provide evidence that inequality of consumption has risen as well. But here, I want to focus on another one of their arguments: the rise in inequality of leisure. But there's a twist here: those with more leisure, and who are benefiting from a disproportionate rise in leisure, tend to be those with lower skill levels. The evidence is in "The Evolution of Income, Consumption, and Leisure Inequality in The US, 1980-2010," published as NBER Working Paper #17982 in April 2012. The paper is not freely available on-line, but many academics will have access through their libraries.

Here's a basic data table on hours of leisure per week, by gender and education level. An explanation from Attanasio, Hurst, and  Pistaferri follows:

"[O]ur measure of leisure includes the actual time the individual spends in leisurely activities like watching television, socializing with friends, going to the movies, etc. A few things are of note from Table 1. First, in 1985, low educated men took only slightly more hours per week of leisure than high educated men. As above, we define high educated as those with more than 12 years of schooling. A similar pattern holds for women. However, by 2007, the leisure differences between high and low educated men are substantial. Specifically, low educated men experienced a 2.5 hours per week gain in leisure between 1985 and 2007. High educated men, during the same time period, experienced a 1.2 hour per week decline in leisure. The new effect is that leisure inequality increased dramatically after 1985. Again, similar patterns are found for women. ...

"Most of the increase in leisure occurred as a result of changes in the upper tail of the leisure distribution. A greater share of low educated men in 2003-7 are taking more than 50 hours per week of leisure than in 1985. This is not the case for higher educated men. If anything, there is slightly lower proportion of higher educated men taking more than 50 hours per week of leisure in 2003-7 than there was in 1985. ... While it is true that the consumption of the high educated has grown rapidly relative to the consumption of the low educated, it is also true that leisure time of the low educated has grown rapidly relative to the leisure time of the low educated. ... [A]s long as leisure has some positive value, the increase in consumption inequality between high and low educated households during the past few decades will overstate the true inequality in well being between these groups."
Just to be clear, Attanasio, Hurst, and Pistaferri are in no way making some foolish argument the rise in income and consumption inequality that benefits those at the top of the income scale shouldn't matter, because it is offset by greater inequality of leisure benefiting those who tend to be at the bottom of the income scale.

But although the U.S. economy has become much less equal with regard to income and consumption, it is worth remembering that these are not the only measures of well-being. For example, I posted on June 29, 2011, about how "Inequality of Mortality" has been greatly reduced. And as leisure has become less equally distributed in a way that tends to favor those with lower skill levels, those with a rising share of leisure are better off in that dimension of well-being, albeit in a way that isn't captured in income or consumption statistics.