Warwick Economics Research Papers ISSN 2059-4283 (Online)
Narratives and the Economics of the Family Robert Akerlof & Luis Rayo (This paper also appears as CAGE Discussion Paper No: 503) August 2020 No: 1299 Warwick Economics Research Papers ISSN 2059-4283 (online) ISSN 0083-7350 (print) Narratives and the Economics of the Family∗ Robert Akerlof† Luis Rayo‡ August 6, 2020 Abstract We augment Becker’s classic model of the family by assuming that, in addition to caring about consumption, the family wishes to further a subjective story, or narrative, that captures its deeply held values. Our focus is on two stories that in many ways are polar opposites. The first one—the protector narrative—gives rise to a type of traditional family where gender roles are distinct, men and women are pushed towards “separate spheres,” and men are expected to be tough and authoritarian. The second one—the fulfillment narrative—gives rise to a type of modern family where roles are less distinct, family members have greater latitude in their decisions, and marriages are based to a greater extent on romantic love. We derive a rich bundle of behaviors associated with each story, and using survey data, we show that our findings are consistent with a variety of empirical patterns. JEL Classification: D10, Z10 Keywords: family, narratives, gender norms, marriage ∗We are especially grateful to Ceren Cibik, Shantanu Singh, and Miguel Talamas for their superb research assistance, and Paul Collier for early and inspiring conversations. We also wish to thank George Akerlof, Nava Ashraf, Sascha Becker, Jean-Paul Carvalho, Alexandra Cieslik, Mirko Draca, Paola Giuliano, Willemien Kets, Rachel Kranton, Hongyi Li, Sharun Mukand, Muriel Niederle, Martin Rotemberg, Chris Roth, Dennis Snower, Janet Yellen, Peyton Young, and seminar participants at Oxford, Frankfurt, Uppsala, Warwick, Stirling, Strathclyde, and ERINN for helpful discussions.
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