Working-class household consumption smoothing in interwar Britain

Scott, P. M. ORCID: https://orcid.org/0000-0003-1230-9040 and Walker, J. ORCID: https://orcid.org/0000-0002-3477-0236 (2012) Working-class household consumption smoothing in interwar Britain. The Journal of Economic History, 72 (3). pp. 797-825. ISSN 1471-6372 doi: 10.1017/S002205071200037X

Abstract/Summary

We examine the strategies interwar working-class British households used to “smooth” consumption over time and guard against negative contingencies such as illness, unemployment, and death. Newly discovered returns from the U.K. Ministry of Labour's 1937/38 Household Expenditure Survey are used to fully categorize expenditure smoothing via nineteen credit/savings vehicles. We find that households made extensive use of expenditure-smoothing devices. Families' reliance on expenditure-smoothing is shown to be inversely related to household income, while households also used these mechanisms more intensively during expenditure crisis phases of the family life cycle, especially the years immediately after new household formation.