ARE modest interest rates driving a major lifestyle change for
Americans or just allowing some women to spend more time at home?
Economists are debating what might be called, "The case of the
missing 20- to-24-year-old women."
Richard Hokenson, chief economist for Donaldson, Lufkin &
Jenrette Securities Corporation, has scanned United States labor
statistics for the past four decades. He has come up with the
hypothesis that a major American "sea change" is afoot: A
demographically pivotal exodus of women from the work force is
causing the decline of the two-paycheck family after a two-decade
rise, and the reappearance of the one-paycheck family as the
fastest-growing household unit.
Based on Bureau of Labor Statistics (BLS) figures showing
employment dropoff among women ages 20 to 24, Mr. Hokenson's ideas
were played up in a story in a recent issue of Barron's magazine.
The implications for the economy would be "profound," the article
notes, identifying a "shocking about-face" in the "yet
unnoticed" trend "that seemed unthinkable just a short while
If read his way, the statistics might signal a return to a 1950s
lifestyle, in which former careerists return to such time-consuming
activities as cooking (eating away at restaurant profits),
comparison shopping (undercutting pricey namebrands), and reining
in purchases on everything from houses to cars.
Tough labor market
John Stinson, a labor economist at the BLS who has calculated
the labor participation rates of women of childbearing ages (20 to
44), says he agrees with Hokenson that there has been a drop-off
beginning about 1988 - and that the drop-off has been most
significant among younger women ages 20 to 24. But he says the
decline is not precipitous, adding that a tough labor market in
recent years could account for part of the decline.
"It seems significant that we have definitely turned a
corner," Mr. Stinson says. "But as to how long this change lasts
and whether it continues downward is hard to know."
Other articles in the business press over the past year have
identified the "women returning home" phenomenon. The decline in
interest rates, most say, has been a major factor, allowing
significant numbers of one-paycheck families to again qualify for
a 30-year home loan. It has also freed up mothers and women of
child-bearing age to return home.
"We are seeing the re-emergence of the American family with
more time than money, rather than more money than time," Hokenson
says in an interview. Those who are not buying their first home are
refinancing their largest monthly obligation (mortgage) - not to
finance travel and purchases but to make lifestyle changes. The
trend is even stronger in Europe, he adds.
Hokenson formed his hypothesis after following the drop-off in
growth stock companies of the 1980s - such companies as Kelloggs,
Phillip Morris, R.J. Reynolds, and Nabisco. "This movement is and
will continue to have a significant impact on the distribution
channels for consumer goods and services as these income-sensitive
households widen and intensify their search for values," Hokenson
Supporting this hypothesis, he says, are these statistics:
* According to BLS figures from 1950 to 1993, the number of 20
to 24-year-old women with jobs began accelerating in 1962 from
about 48 percent to about 75 percent in 1988. …