Inequality in the Joint Distribution of Consumption and Time Use

This paper examines inequality in both leisure and consumption over the past four decades using time use surveys stretching from 1975 to 2016. We show that individual and family characteristics, especially when including work hours, explain most of the long run variation in leisure. We then use these characteristics to predict the distribution of leisure 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. 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. Overall, these results indicate that including both leisure and consumption, as opposed to just consumption, in a measure of economic well-being will result in less inequality. However, because the consumption-leisure gradient is not very steep, the dampening effect of leisure on overall inequality is small.