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Individual consumption, time use and their distribution for the Dutch population

PhD ceremony:Mr B.J. (Bart) van Leeuwen
When:December 02, 2019
Supervisor:prof. dr. R.J.M. (Rob) Alessie
Co-supervisor:dr. J. de Bresser
Where:Academy building RUG
Faculty:Economics and Business
Individual consumption, time use and their distribution for the
Dutch population

Poverty among cohabitants is underestimated

A cohabiting couple without children needs to earn an average of € 1,781 per month if each partner wishes to attain the sufficient standard of welfare for a single person living on the edge of poverty (€ 1,100 per month).  This was the calculation made by household economist Bart van Leeuwen. He concludes that, in general, poverty amongst cohabiting couples in the Netherlands is underestimated.

According to Van Leeuwen, the poverty line for cohabiting couples is between € 1,425 and € 1,781. ‘The amount that you choose within this range as the actual poverty line is dependent on political choices about the extent to which you want to take into account inequality within households’, says the PhD student. What is striking is that, as a whole, the range calculated by Van Leeuwen appears to be higher than the amount that the Social and Cultural Planning Office (SCP) and the CPB Netherlands Bureau for Economic Policy Analysis apply when determining the poverty line. Van Leeuwen: ‘My research concerns the period 2009 to 2013. In a report from 2014, the SCP and CPB applied a poverty line of € 1,390 for cohabiting couples.’

Women have more influence than men

Van Leeuwen also calculated the extent to which both women and men influence the decisions made by a cohabiting couple. On average, the influence of women on the expenditures of childless couples is higher than that of men. This effect is stronger when it comes to decisions about expenses for commodities than it is for decisions about the use of time. Both men and women with a working partner demonstrated less influence than those with a non-working partner.

Individual inequality decreased

The PhD student researched how different types of households (single individuals and couples, with or without children) decide which commodities to buy and how to use their time. Van Leeuwen regarded households not as a single entity but as a group of individuals who make collective decisions. He focused his research on poverty, on the effects of the reduction in childcare allowance between 2011 and 2013 and on consumption inequality in the Netherlands. Van Leeuwen researched inequality by looking at the consumption per individual, which is a better benchmark of individual welfare over a person’s life course than income or assets. He concluded that inequality regarding the individual consumption of working people significantly reduced between 2009 and 2017.

Childcare allowance

For the parents within Van Leeuwen’s study sample, the reduction in childcare allowance between the years 2011 and 2013 led to an increase in their net costs of childcare by an average of 53%. As a consequence of this, the parents reduced their gross spending on childcare by an average of 42%. The number of hours of childcare purchased by the parents fell by roughly the same percentage.

Surprisingly enough, the reduction in childcare allowance did not have a substantial effect on the number of hours that the parents spent at work or in caring for their own children. This means that the parents reduced the number of hours that their children were placed in childcare but did not compensate for this by caring for their children more by themselves. It is therefore likely that the parents made informal childcare agreements, such as with the children’s grandparents.