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ECONOMICS
REVIEW
ECONOMICS
1992 Vol. 5 No. 3
Feature Articles
2 An Overview of Home-Based Work:
Editor Results Front a Regional Research Project
Joan C. Courtless
Marilyn M. Furry and Mark Lino
Editorial Assistant
Jane W. Fleming 9 Expenditures for Food Away From Home
Julia M. Dinkins and M. Dianna Edlow
Family Economics Review is written
and published each quarter by the 18 Health Care Trends
Family Economics Research Group,
Nancy E. Schwenk
Agricultural Research Service,
U.S. Department of Agriculture,
Washington, DC.
The Secretary of Agriculture has
Research Summaries
determined that the publication of
this periodical is necessary in the
transaction of the public business
required by law of the Department.
25 Changes in Income, 1984-89
This publication is not copyrighted.
26 Household Use of Financial Services
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Feature Articles
An Overview of Home-Based
Work: Results From a Regional
Research Project
By Marilyn M. Furry
Assistant Professor
The Pennsylvania State University
Mark Lino1
Economist
Family Economics Research Group
This study uses data from a regional research project to provide an overview
of the nature of home-based work, characteristics of home-based workers,
and home-based workers’ assessment of their work. Most home-based
workers (75 percent) owned their own business and 47 percent worked 40
or more hours per week. Home-based workers were a heterogeneous group
in regard to occupation, sex, age, education, and presence of children. Most
(83 percent) home-based workers were satisfied with their employment. Most
planned to continue working at home. Results of this study should give policy¬
makers a better understanding of this growing segment of the labor force.
n 20th-century America, regularly scheduled employment. The
work and home have been study found that an estimated 17.3 mil¬
two separate aspects of lion people engaged in some nonfarm
most people’s lives. A work-at-home, with 1.9 million people
growing number of Americans, how¬ engaged exclusively in home-based,
ever, have merged the two, resulting nonfarm work. Of persons working
in home-based work. Although home- exclusively at home, two-thirds were
based work is often viewed as an ideal women. About half were in service
work arrangement and a trend of the industries. Mean hours per week
future (7,2). few studies have examined worked at home was 32.
such employment.
Based on a national survey of about
A Bureau of Labor Statistics (BLS) 2,500 randomly selected households,
study by Horvath (4), using the 1985 a study by LINK Resources estimated
Current Population Survey, focused that in 1991,38.4 million people per¬
on people who worked at home. formed income-producing or job-related
Work-at-home was defined as any work-at-home. Such work could be part
work done at home as part of one’s time or full time or involve the use of
one or more of the following: personal
'The authors wish to express their appreciation computer, modem, fax, multiple phone
to Diane Masuo of the University of Hawaii- lines (5). Estimates of the number of
Honolulu for her help in data analysis.
people who worked at home in this
Family Economics Review
study were much higher than numbers Data served as the only office from which
reported in the BLS study because of a this work was arranged.
broader definition of work-at-home. In The NE-167 Regional Research Project,
the BLS study, people were included “At-Home-Income-Generation: Impact Telephone interviews were conducted
only if work-at-home was part of their on Management, Productivity, and with 899 households with a home-based
regularly scheduled workweek. Stability in Rural/Urban Families," was worker in March and April 1989. Data
supported by the Agricultural Experi¬ were collected on home-based workers'
Of all home workers in the LINK ment Stations of Hawaii, Iowa, Michigan, socioeconomic characteristics, manage¬
Resources study, 31 percent were self- Lincoln University (Missouri), New ment behavior and strategies, and the
employed. Fifty-four percent were York. Ohio, Pennsylvania, Utah, and relationship between work and family.
male, and 56 percent had a college Vermont, and the U.S. Department of Weights were devised to account for the
degree. Average age was 40 years, and Agriculture. populations in each of the nine States.
mean hours per week worked at home Results reported in this study are based
was 17. Eighty percent were married, To identify home-based workers, a on weighted data. A value for income
and 51 percent had children under age random sample of households was was imputed in all cases where it was
18 in the household; 23 percent had a selected from telephone listings in each not reported.
child under age 6. Average household of the nine States (6). Screening calls
income was $50,400. were made in February 1989 by the Iowa Because of varying definitions of
State University Statistical Laboratory work-at-home, the results of this study
Heck examined the prevalence of to find households with at least one are not comparable with those of the
working at home using a sample of worker based in the home. For each LINK Resources study, which does not
6,744 people from the 1984 Panel Study State, the goal was 100 completed focus solely on home-based workers but
of Income Dynamics (3). The study interviews. A home-based worker was includes all people who work at home
found that 5 percent of workers were defined as a person age 18 or older who at least part of the time. Results reported
engaged in home-based employment, had worked 6 or more hours per week here are more comparable with the BLS
which was defined as situations in or a minimum of 312 hours during the analysis on people who worked exclu¬
which the worker did not travel to work previous 12 months. Although the home- sively at home and the Heck study,
or the amount of travel time varied (such based worker could have performed some which examined people who did not
as when workers travel as part of their part of the job outside the home, the home commute to work on a regular basis.
jobs and work out of home offices).
Home-based workers were more likely
to be white, have a lower level of family
income, have a high school diploma or Occupations of home-based workers:
more, and work shorter hours than other
workers. Older people, those without Marketing and sales - door-to-door or home salespeople, real estate and
children, those with young children insurance agents, and mail order businesses.
under age 6, self-employed workers,
Contracting - carpenters, painters, roofers, masons, and electricians.
and farmers were also more likely to be
Mechanical and transportation - plumbers, locksmiths, radio and television
involved in home-based employment
repair people, and auto mechanics.
than others.
Services - beauticians, hairdressers, pet groomers, fitness instructors, and elder
Although these studies provided infor¬ and child-care providers.
mation on some employment located in
Crafts and arts - potters, clothing designers, jewelrymakers, weavers, and
the home, more needs to be known
teachers of these crafts and arts.
about home-based workers that either
Professional and technical - lawyers, therapists, engineers, accountants,
own their own business or are paid by
authors, teachers, architects, and consultants.
an outside employer.
Clerical and administrative support - secretaries, bookkeepers, data processors,
and tax preparers.
Management - real estate managers and special events coordinators.
Agricultural products and sales - sellers of flowers, fruits, and vegetables.
1992 Vol.SNo. 3 3
Nature of Home-Based Work Table 1. Nature of home-based work
Of the home-based workers in the nine Own Paid by
States, 75 percent had their own business Characteristic All business employer
and the remaining workers were paid by
an outside employer (table 1). There Percentage of home-based workers 100 75 25
were occupational differences between
Percent
home-based business owners and paid
workers. (See box, p. 3, for example of Occupation
each occupation.) Of workers paid by Marketing/sales 23 15 53
an outside employer, 53 percent were Contracting 15 18 5
engaged in marketing or sales. Such Mechanical/transportation 13 16 6
work typically involved a person selling Services 12 15 3
an employer's products or services door Crafts/arts 12 15 2
to door, on the telephone, or from the
Professional/technical 12 11 13
home. Professional/technical and clerical/
Clerical/administrative support 6 4 11
administrative support work were the
Management 4 3 5
next most common occupations (13 per¬
Agricultural products/sales 3 3 2
cent and I 1 percent) of paid workers.
Hours worked per week
No occupational category dominated for Less than 20 35 37 29
home-based business owners. Eighteen
20 - 29 10 11 8
percent were contractors, such as car¬
30 - 39 8 9 5
penters or electricians, and 16 percent
40 or more 47 43 58
did mechanical or transportation work.
Fifteen percent each did sales or market¬ Years in home-based work
ing work; service work, which includes Less than 5 39 36 47
home child care; and work involving 5-9 24 25 22
crafts or art. These occupations of 10- 14 16 17 14
home-based workers differ from those
15 or more 21 22 17
in the BLS study because of dissimilar
classification of occupation; the BLS Additional employment outside home
study included many professional Yes 26 28 19
occupations under services. No 74 72 81
Assistance with work1
The average number of hours worked
Yes 56 61 41
per week in home-based work was 36
No 44 39 59
for business owners and 39 for paid
workers. This represents the average for
Tor business owners, includes household members and others; for paid workers, includes only household
50 weeks per year; some people may
members.
work more hours per week for fewer
weeks per year. Average hours worked
per week was somewhat skewed.
Twenty-nine percent of paid workers In addition to work-at-home, many A majority (56 percent) of home-based
and 37 percent of business owners home-based workers were employed in workers had paid or nonpaid assistance
worked less than 20 hours per week in other jobs outside the home. A higher with their work. Data collected on
home-based employment, yet 58 per¬ proportion of business owners than paid assistance with work included both
cent of paid workers and 43 percent workers were employed outside the household members and nonmembers
of business owners worked more than home (28 percent vs. 19 percent). It for business owners but only household
40 hours per week in home-based appears that home-based work is a members for paid workers. A larger
employment. The average number of years complement to outside work for some percentage of business owners than paid
in home-based employment was 9 for rather than an alternative. workers had assistance with their work
business owners and 8 for paid workers. (61 percent vs. 41 percent).
4 Family Economics Review
Of business owners receiving assistance Table 2. Characteristics of home-based workers
with their work, 70 percent had at least
one paid employee; 24 percent had four Own Paid by
or more. Sixty-five percent of business Characteristic All business employer
owners also had help with their business
from people who were not reimbursed. Percent
This uncompensated assistance was
Sex
most often from family members. Of
Male 58 58 57
paid workers receiving assistance from
Female 42 42 43
household members, this help was un¬
compensated in 73 percent of house¬ Age
holds; in only 10 percent of households
Under 30 10 9 11
was it always compensated.
30 - 39 36 36 38
40-49 24 22 28
Characteristics of Home-Based
50 - 59 18 21 11
Workers
60 and over 12 12 12
The majority (58 percent) of home- Education
based workers were male (table 2). Elementary or some high school 6 7 2
This differs from the BLS study that
High school diploma 33 35 27
found the majority of people working
Some college 30 30 31
exclusively at home were female. The
College degree 20 18 27
difference may reflect the earlier data
Some graduate school 11 10 13
(1985) used in the BLS study. In recent
years, there has been a trend for more Marital status
men than women to enter home-based Married 85 85 84
employment (5). Almost no difference Never married 15 15 16
in gender existed between home-based
Number of children
workers that owned their own business
and those paid by an outside employer. 0 46 46 45
1 18 16 21
Average age of home-based workers 2 22 22 23
was 44; 30 percent were over age 50. 3 or more 14 16 11
Horvath hypothesized that work-at-home
Children under age 6
may be an attractive option for older
Present 28 27 32
people who may find a daily commute
Not present 72 73 68
very tiring (4). Workers who owned
their own business were older than those Place of residence
paid by an outside employer. Thirty-
Town or city over 2,500 54 52 58
three percent of business owners were
Town or city under 2,500 19 20 18
age 50 or over, compared with 23
Rural nonfarm 20 20 19
percent of those paid by an outside
Farm 7 8 5
employer.
Most home-based workers had a high
school diploma. A large proportion percent, respectively, had a college home-based workers had no children in
(31 percent) had a college degree. Heck degree. the home, and 72 percent did not have
also found that education was positively children under age 6 in the home.
related to the probability of home-based Regarding marital status, 85 percent Eighteen percent had one child, and
employment. Home-based workers paid of home-based workers were married. 14 percent had three or more children.
by an outside employer had a higher Although home-based work is often Heck found that not having children
level of education than those owning viewed as an ideal way to manage was positively related to the probability
their own business: 40 percent and 28 employment and family, 46 percent of of home-based employment.
1992 Vol. 5 No. 3 5
Figure 1. Net before-tax income from home-based work
Percent
$5,000-9,999 $15,000-19,999 $25,000-29,999
|2| Own business [ Paid by employer
A town or city with a population over Assessment of Home-Based the time-money relationship for such
2,500 was the place of residence for a Work work, a higher percentage of business
majority (54 percent) of home-based owners than paid workers received
workers; paid workers were more likely Seventy-six percent of home-based “a lot” of satisfaction from home-based
than business owners to live in a town workers thought they made adequate or employment (85 percent vs. 76 percent).
or city with a population over 2,500. good money for the time spent in such
Seven percent of home-based workers work. Six percent lost money on their Thirty-four percent of home-based
lived on a farm. Some of the home- home-based work during the previous workers expected their work to get
based work of these people may involve year. People paid by an outside em¬ better, and 7 percent expected it to get
farm produce. ployer were more positive in terms of worse. For the majority (59 percent) of
the time-money relationship than busi¬ people, home-based work was expected
Net before-tax income from home-based ness owners; 86 percent of paid workers to stay the same. A higher proportion of
work was higher for people paid by an thought they made adequate or good business owners than paid workers
outside employer than for business money for the time spent in home-based expected their work to get worse. Most
owners (figure 1). For paid workers, work, compared with 72 percent of home-based workers were optimistic
income from home-based work business owners (table 3). This is not about their future income from such
averaged $24,400 with 44 percent surprising because paid workers received work. Fifty-nine percent expected their
having a net income of $30,000 and a higher income from home-based income to increase in the next 3 years;
over. For business owners, income from employment than business owners. 17 percent thought it would decrease,
home-based work averaged $15,700 and a small proportion of these people
with 14 percent having a net income of Most (83 percent) home-based workers were thinking of quitting their home-
$30,000 and over. indicated they received "a lot” of based employment because of this.
satisfaction from their work, whereas There was little difference in direction
5 percent stated they received “a little of expected income from home-based
or none.” Although business owners work between business owners and
earned less income from home-based those paid by an outside employer.
work and were less positive in terms of
6 Family Economics Review
