Organising household consumption and occupational proportions: Evidence from Nigeria

Abstract

Purpose

The purpose of this paper is to contribute to the occupational status and entrepreneurship research in developing countries by proposing that there are implications for household consumption depending on the occupational status proportion of households. When the occupational proportion of the household changes, household consumption is affected. This effect also changes depending on what quantile level the household is in terms of household consumption.

Design/methodology/approach

The paper makes use of OLS and quantile regressions to examine 6,919 households comprising 40,294 individuals from the 2009 Nigerian Living standards measurement survey.

Findings

The paper finds that there are implications for household consumption based on the proportion of individuals in each occupational category. The contributions of each employment proportion changes at different quantiles with self-employed individuals increasing household consumption at the lower quantiles but reducing household consumption at the upper quantiles. Crucially, having a higher proportion of unemployed individuals in the household is oftentimes better than having a higher proportion of own account self-employed individuals.

Research limitations/implications

This paper offers new insights into how occupation proportion influences household consumption in developing countries. As a result, the household could seek to organise its members in such a way as to maximise combined household consumption, as diverse occupational statuses contribute differently to the household consumption at different quantile levels. The nature of the data used in this study however does not allow for causality tests.

Practical implications

The proportion of employment statuses in the household has implications for household consumption and so the mix of employment in the household is important. The self-employed could also be involved in activities to enhance household consumption that are not captured by labour income. However, self-employment does not seem to always have a positive effect on household consumption and sometimes unemployment might be better.

Originality/value

The paper provides a new way to view the household as an organising entity in terms of how it can allocate employment proportions to maximise household consumption.

Citation

Olarewaju, T. (2018), "Organising household consumption and occupational proportions: Evidence from Nigeria", International Journal of Organizational Analysis, Vol. 26 No. 4, pp. 748-772. https://doi.org/10.1108/IJOA-03-2017-1141