The Material Well-Being of Single Mother Households in the 1980s and 1990s: What Can We Learn From Food Spending?

A combination of welfare reform, expansions of the Earned Income Tax Credit, and other policy changes led to increases in the labor supply of single mothers in the 1990s and a decline in their participation in cash welfare programs. Whether the material well-being of single mothers and their families has improved is less clear. Meyer and Sullivan (2004) report that single mothers’ food expenditure increased during the 1990s and conclude that their well-being either improved or remained the same, relative to single childless women or married women with children. Our reading of the data suggests that a more cautious interpretation is in order. In particular, we note that increases in food spending do not necessarily reflect increases in well-being. Total food spending may change even though the actual food consumed did not if there is a shift from home-prepared food to commercially-prepared or restaurant food. We examine trends in spending on food at home and food away from home using data from the Consumer Expenditure Diary Survey and find that they are consistent with such a shift. We find that the entire increase in food expenditure can be explained by a shift from food at home to food away from home.