Inequality in the Joint Distribution of Consumption and Time Use

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This paper examines inequality in both leisure and consumption over the past four decades. Using time use surveys stretching from 1975 to 2016, we estimate the distribution of leisure time conditional on hours worked and other individual level and family level characteristics. We show that these characteristics, especially when including work hours, explain most of the long run variation in leisure. We then use these estimates to predict the distribution of leisure using work hours and other characteristics in the Consumer Expenditure Survey, a survey that also provides detailed information on consumption. The advantage of this approach is that it gives us measures of consumption and leisure at the family level within a single data source. Combining consumption and leisure allows us to characterize more accurately changes in the distribution of well-being. We find that leisure time is highest for families at the bottom of the consumption distribution, and typically declines monotonically as consumption rises. However, the consumption-leisure gradient is small. We find noticeable differences across family types, with the gradient being largest for single parent families and single individuals and smallest for families with a head age 65 or older. The negative relationship between consumption and leisure appears strongest during the period around the Great Recession. We find that including both leisure and consumption, as opposed to just consumption, in a measure of economic well-being results in less inequality. The negative association between leisure and consumption is a sufficient condition for this result. However, the degree to which leisure inequality offsets consumption inequality depends on the valuation of leisure.