Contact:
Tony Pals, tpals@aera.net
(202) 238-3235, (202) 288-9333 (cell)

Victoria Oms, voms@aera.net
(202) 238-3233

Study: “Inequalities in Parental Spending on Young Children: 1972–2010”
Authors: Sabino Kornrich (Emory University)

Published online June 7, 2016, in the AERA peer-reviewed journal AERA Open

Main Finding:

• Spending on child care and learning enrichment goods—toys, games, books, fees for activities, and other items in the home that may stimulate child achievement—for children younger than 6 has grown significantly among the wealthiest U.S. households since the 1970s, while it has stagnated for all other income groups, according to new research published online today in AERA Open, a peer-reviewed journal of the American Educational Research Association.

Details:

• Using data from the Bureau of Labor Statistics’ Consumer Expenditure Survey (CES), study author Sabino Kornrich, an assistant professor at Emory University, found that the wealthiest top 10 percent of households, after adjusting for inflation, tripled their total spending, from $3,000 in the early 1970s to $9,000 in 2010, with steady increases across the entire period.
  
  
• Spending among the next-highest 30 percent of high-earning households also increased, but mostly between the early 1970s and early 1990s. For the bottom 60 percent, spending increases were smaller and occurred only before the mid-1980s.
  
  
• Spending among households in the bottom 20 percent increased by $152 in inflation-adjusted dollars from the early 1970s to the early 1980s, before stagnating, and has remained nearly constant since then.
  
  
• As a result of the growing inequality gap, “young rich children grow up very differently from their less rich peers and very differently from rich children even 30 years ago,” said Kornrich.
  
  
• “Compared to the past, we now expect high-income students to come in to kindergarten or first grade with experiences very different from those of other children,” Kornrich said. “One difference that might be related is a growing gap in test scores at a very early age between wealthy children and their peers.”
  
  
• Kornrich found that in the 1970s, rich parents spent little more than poorer parents on day care, because day care was rarely used regardless of income. Day care did not make up the largest share of the spending gap until the early 1990s. Since then, spending by richer parents on day care continued to increase, causing the gap between wealthy and lower income households to grow.
  
  
• Kornrich also found that the growth in spending is primarily explained by increases in parents’ income but also results from differences in parental education and wives’ share of household earning. There are also some unexplained increases in spending, which may have resulted from an increase in the perceived importance of early childhood education, causing high-income households to increase the amount they spend on education.
  
  
• Income differences between the top 10 percent and the bottom 20 percent are high and have increased over time. For those in the bottom 20 percent, the average household income was around $19,000 in the early 1970s and declined to roughly $10,000, after adjusting for inflation, by the late 2000s. In contrast, top incomes increased by $60,000 in constant dollars.
  
  
• In both periods, nearly all households in the top 10 percent were two-parent families. For households in the bottom 10 percent, two-parent families were rare, at 52 percent, in the 1970s and became rarer, at 37 percent, in the 2000s.
  
  
• Rich households today are more likely than in the past to have parents with at least a bachelor’s degree. Low-income households today also have higher levels of education, although they are still unlikely to have completed college degrees.
  
  
• Households where the wife’s share of earnings is higher and where the wife’s level of education is also higher are also more likely to spend more.

To see the full study, click HERE.

To speak with study author Sabino Kornrich, please contact Tony Pals at tpals@aera.net or Victoria Oms at voms@aera.net.

To browse more recent AERA research, click here.