Economic Socialization in the American Family: The Prevalence, Distribution, and Consequences of Allowance Arrangements

Abstract

During the late nineteenth century, when American children left the factory for school in large numbers, the problem of newly insolvent children arose, who needed funds but who could no longer earn them through paid work. Though the idea of giving an allowance began in the middle class, parents of all social classes were advised to give their children a small amount of money each week (see Zelizer, 1985, for an excellent discussion of the practice of allowance during this period). A prescriptive family economics guidance literature extols the benefits of regular allowance for the development of sound money management skills in children (Baran & Tarrant, 1981; Gruenberg, 1965; Horton, 1988; McKitric, 1986). According to family economic (Baran & Tarrant, 1981; Gruenberg, 1965; Horton, 1988; McKitric, 1986) and financial education (Sloane, 1991) specialists, children learn through the receipt of a regular allowance how to manage money more wisely; they learn how to make decisions about how to save and spend their money and how to plan ahead for future economic goals. By giving children a fixed amount of money in the form of a weekly allowance, rather than handing out varying amounts of cash as the need arises, parents provide their children with practical learning experience in money management. The children presumably learn how to make financial decisions within the constraints of their own allowance. Though such claims are plausible, there have been few systematic attempts to test them. Whereas contemporary family economic advisors and educators agree about the educational benefits of allowance, there is debate surrounding its administration, particularly about whether or not an allowance should be made conditional upon the performance of household chores. Some think that children learn a valuable lesson when allowance is linked to the performance of household chores: children learn to work for pay (Sloane, 1991). Others, however, think that allowance should not be conditional upon household chores (Balter, 1988; Baran & Tarrant, 1981; Gruenberg, 1965; Horton, 1988; McKitric, 1986), arguing that this practice undermines the collective character of the family. According to this perspective, children should realize that all family members benefit from the maintenance of the household; therefore, all should contribute to it. Performing household chores without monetary compensation is thought to be an important part of participating in family life (Gruenberg, 1965; Henderson, 1988; Horton, 1988). While experts agree that children should not be paid for routine or regular household chores, some (Henderson, 1988; Gruenberg, 1965; Horton, 1988) allow an exception: children can be paid for special household tasks that the parents might otherwise hire another person, outside the family, to perform (e.g., lawnmowing, snowshoveling, washing the car, babysitting). Such a practice of for extra jobs would not, in these authors' views, contradict the norm that regular household work is contributed by family members without extrinsic reward. Similarly, since the purpose of the allowance is to teach children effective money management skills, it is argued that allowance should not be used as a reward or punishment for desirable or undesirable behavior (Balter, 1988; Gruenberg, 1965; Horton, 1988; Sloane, 1991). Making allowance contingent on the child's good behavior would again subvert more genuine motivations. In one recent study, Miller and Yung (1990) found that allowance has different symbolic meanings in families. Echoing the prescriptions of the family life educators, some parents viewed allowance as education for the future handling of money and other economic behaviors. Others viewed a regular allowance as payment for work performed in the household and as contingent on the effective execution of tasks that have been assigned by the parents. Similarly, Furnham and Thomas (1984a), found that half of the adults in their survey felt that children should perform household chores in exchange for an allowance. …

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 51 citations exist upstream.