DOCSLIB.ORG

The Economics of the Family

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Economics of the Family Österreichisches Institut für Familienforschung Austrian Institute for Family Studies Nr. 45 | 2004 Norbert Neuwirth Astrid Haider The Economics of the Family A Review of the development and a bibliography of recent papers KONTAKT: [email protected] | +43-1-535 14 54-22 1 Abstract The paper provides an overview of the various strands of research within the Economics of the Family. Whereas traditional microeconomic analysis treats the household as a black box the New Home Economics approach by Becker/Gronau distinguishes between individuals, but family members have unitary preferences and therefore exhibit one unique, joint utility function. Within game-theoretic models of intra-family resource allocation – cooperative as non-cooperative games – the, generally different, individual preferences are determinants of all (possible) bargaining outcomes . The second part of the paper consists of a bibliography containing relevant recent papers sorted by the different approaches. Abstract - Deutsch Das Papier gibt einen Überblick über die verschiedenen Forschungsströmungen der Familienökonomik. Während die traditionelle Mikroökonomie den Haushalt als ‚Black Box’ behandelt, unterscheidet der Ansatz der ‚New Home Economics’ von Becker/Gronau zwischen Individuen innerhalb eines Haushaltes, weist diesen jedoch eine gemeinsame Nutzenfunktion, demnach auch einheitliche Präferenzen, zu. Bei – kooperativen wie nicht-kooperativen – spieltheoretischen Modellen intrafamiliärer Ressourcenallokation werden die unterschiedlichen individuellen Präferenzen als bestimmende Faktoren der (möglichen) Verhandlungsergebnisse behandelt. Der zweite Teil des Papiers besteht aus einer Bibliographie, die die wichtigsten jüngeren Papiere zu den oben erwähnten Strömungen erfasst. 2 The Economics of the Family Content 1 Introduction........................................................................................................................................................................ 4 2 Review: The evolution of “Family Economics” ............................................................................................... 4 2.1 Samuelson’s ‘Social Welfare Contours’...........................................................................................................................5 2.2 Resource allocation within the family...............................................................................................................................7 2.3 Home production ........................................................................................................................................................................7 2.4 Family decisions as a bargaining problem....................................................................................................................11 2.4.1 Basic idea.................................................................................................................................................................................12 2.4.2 Household decisions as a cooperative game....................................................................................................12 2.4.2.1 Comparison to traditional approaches.....................................................................................................13 2.4.2.2 Static model with time allocation ................................................................................................................15 2.4.3 Household decisions as a non-cooperative game .........................................................................................19 2.4.4 Collective models of household behaviour .......................................................................................................19 3 Bibliography: Developments in “family economics”.................................................................................. 22 3.1 Ancient developments that lead to New Home Economics..........................................................................22 3.2 New Home Economics: Altruistic dictators?...........................................................................................................25 3.3 Game theoretic approaches ...............................................................................................................................................46 3.4 The theory of collective activities ....................................................................................................................................66 3.5 Empirical tests and/or comparisons of the main types of theory.................................................................73 3.6 Time use analysis........................................................................................................................................................................82 3.7 Other empirical work in the field of family economics ......................................................................................89 3.8 General Equilibrium approaches....................................................................................................................................102 3.9 Handbooks, readers, surveys, collected editions.................................................................................................104 Literature....................................................................................................................................................................................105 3 The Economics of the Family 1 Introduction Questions about joint decision behaviour and resource distribution within households have been focused by economists for decades. Regretfully, these topics were often considered as not essential to economic analysis. Most textbooks in economics do not distinguish between market behaviour of individuals or households. The household’s welfare functions are assumed to have identical properties as individual’s utilities. Examining e.g. revealed preferences it does not matter whether the identified preference pattern corresponds to the genuine utility of the observed individual or to the agreed joint demand function of the household, but when modelling family dynamics and resource allocation over time, individuals’ and groups’ utility functions have to be separated analytically. The paper is divided in two parts: A review, where the main ideas of family economics are discussed and modelled, and a bibliography, where recent papers and books building their approaches on the seminal papers and ideas discussed in the review are cited and commented. ‘Recent’ works are defined as contributions that were published from 1990 on. Reviews of works before this period are well documented within the ‘Handbook of Population and Family Economics’1 published in 1997. Elder seminal papers (e.g. Chiappori (1989), Manser/Brown (1980) Becker (1965); Samuelson (1956) ) Existing Review Papers, Books and more „recent” approaches to family economics Recent Publications in (related areas of) family economics (~1989 – 2004) Figure 1: Research strategy for the bibliography Recent papers working on the models discussed are identified via literature research within EconLit, the Social Science Citation Index, JStore and ProQuest. The research strategy is straightforward: The (first round) thematic research is based on typical keywords like ‘new home economics’ or ‘collective labour supply’, then the citations of articles are compared with a list of seminal papers in the field of family economics. That way the evolution of family economic models within the last fifteen years can be reconstructed (Figure 1). Of course a bibliography like this can never be complete. Nevertheless, this work can be a modest contribution to the ongoing development of “family economics”. 2 Review: The evolution of “Family Economics” The review starts with a discussion on the existence of social indifference curves (chapter 2.1) that determined some later developments in this field, continues with the ‘New Home Economics’-approach by Becker/Gronau (chapter 2.2 to 2.3), and finally comes to game theoretic models of intra-family resource allocation (2.4). Here applications of the classical concepts of non-cooperative (2.4.3) and 1 Rosenzweig, M. R. and O. Stark (1997) "Handbook of Population and Family Economics"; Elsevier 4 The Economics of the Family cooperative (2.4.2) games will be discussed. One well known reduced-form epigone model of the cooperative approach, the so called ‘collective labour supply model’ that can be extended to all activities considered, will be discussed in (2.4.3). 2.1 Samuelson’s ‘Social Welfare Contours’ Formelabschnitt 1One of the first contributions regarding the dependence and characteristics of household's preferences was a seminal paper of Paul Samuelson (1956). Criticising broadly Scitovsky's2 attempt to build up social indifference curves for nations respectively large groups or communities within nations, Samuelson proved the non-existence of such social indifference functions as the groups' members are not in permanent personal contact. Instead - partly contradicting Scitovsky's approach - he developed a 'theory of social welfare contours' for families. Within this approach, Samuelson restricted resource reallocation to intra-family shifts in income. Personal preferences are described by a standard utility function where xi is a vector for all goods and services traded on markets. uuiii==()xxp st ..() i′ I i [1.1] The family's utility is defined as a weighting
Load more

Recommended publications
  • Marriage, Theories Of" Entry for the Elgar Companion to Feminist Economics Edited by Meg Lewis and Janice Peterson
    "Marriage, theories of" Entry for the Elgar Companion to Feminist Economics edited by Meg Lewis and Janice Peterson. Aldershot, U.K: Edward Elgar, forthcoming. Economists who perform empirical studies on labor supply, consumption, and a few other topics typically take account of marital status. However, few economists have written theories of marriage or used a theoretical approach to marriage in their empirical studies. This underemphasis on theory stands in sharp contrast to the preference for theoretical analysis which characterizes economics in general. Given the small number of economic theories of marriage, and their relatively young age, it is not surprising that there is no economic theory of marriage which is as widely accepted as the prevailing economic theory of the firm. There are three kinds of economic theories of marriage: marxist theories, neo-classical theories, and game theories. Economics is about processes of production, allocation of resources, and distribution of goods and services. Three major institutions which regulate and govern these processes are families, firms, and governments. Families govern production and distribution within households (intra-household allocation), whereas firms and governments deal with inter- household allocation of resources. Ignoring subtle legal definitions of marriage, the study of marriage includes (1) the study of the formation and dissolution of couples, which are two major ways by which families are formed, and (2) the study of economic decisions by married households, especially decisions related to marriage market conditions and marital institutions. Parallel areas of study in business economics include formation of firms and labor relations. Theories of the firm and labor theories have attracted much more talent and attention than theories of marriage.
    [Show full text]
  • Syllabus.Pdf
    UNIVERSITY OF NOTRE DAME Department of Economics Spring 2020 Prof. Kasey Buckles, Ph.D. E-mail: [email protected] Office: 3052 Nanovic Hall Office Hours: Monday 1:00-2:30 p.m., Tuesdays 2:00-3:30 p.m., or by appointment ECON 43550: Economics of the Family (M/W 11:00-12:15, B58 Jenkins-Nanovic) This class is cross-listed with Gender Studies and counts toward the Poverty Studies Interdisciplinary Minor. This is a writing-intensive seminar course, in which we will use economic theory and empirical methods to study the family. Topics will include economic models of the household; the determinants of marriage and fertility; how marriage, fertility, and family structure are related to other outcomes (including education, wages, inequality, and labor force participation); and public policies that affect the family and family formation. Students will learn to read, evaluate, and conduct empirical economic research. The course will have two main components. First, we will be reading academic journal articles in the area of the economics of the family. The goal is to learn what economists currently know and think about this topic, with an emphasis on empirical work. We will discuss the methods and findings of the papers, and identify their strengths and weaknesses. Second, you will develop an empirical project that addresses an original research question. This will involve descriptive data work, regression analysis, and advanced econometric techniques as appropriate. The goal is to do a thorough analysis that addresses issues of data quality, sample selection, and causality. We will rely heavily on material from econometrics (EC 30331) and will use the statistical software package Stata.
    [Show full text]
  • The Economics of Work and Family
    Upjohn Press Upjohn Research home page 1-1-2002 The Economics of Work and Family Jean Kimmel W.E. Upjohn Institute Emily P. Hoffman Western Michigan University Follow this and additional works at: https://research.upjohn.org/up_press Part of the Labor Economics Commons Citation Kimmel, Jean, and Emily P. Hoffman, eds. 2002. The Economics of Work and Family. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. https://doi.org/10.17848/9780585469683 This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 4.0 License. This title is brought to you by the Upjohn Institute. For more information, please contact [email protected]. The Economics of Work and Family The Economics of Work and Family Jean Kimmel and Emily P. Hoffman Editors 2002 W.E. Upjohn Institute for Employment Research Kalamazoo, Michigan Library of Congress Cataloging-in-Publication Data The economics of work and family / Jean Kimmel and Emily P. Hoffman, editors. p. cm. Includes bibliographical references and index. ISBN 0-88099-246-8 (hardcover : alk. paper)—ISBN 0-88099-245-X (pbk. : alk. paper) 1. Work and family —United States. I. Kimmel, Jean. II. Hoffman, Emily P. HD4904.25.E29 2002 306.3’6—dc21 2002012699 © 2002 W.E. Upjohn Institute for Employment Research 300 S. Westnedge Avenue Kalamazoo, Michigan 49007–4686 The facts presented in this study and the observations and viewpoints expressed are the sole responsibility of the authors. They do not necessarily represent positions of the W.E. Upjohn Institute for Employment Research. Cover design by J.R. Underhill. Index prepared by Diane Worden.
    [Show full text]
  • Family Planning and Climate Change
    Family Planning and Climate Change Reyer Gerlagh* Veronica Lupi Marzio Galeotti * February 18, 2019 The most recent version of our paper can be found here: www.dropbox.com/s/3djwfexr9zaexuh/GLG 2018.pdf?dl=0 Abstract Historical data show that the increase in emissions is for only one-fourth attributable to the growth of emissions per person, whereas three-fourths are due to the growth of pop- ulation. This striking evidence notwithstanding, the majority of climate-economic studies focus on emissions through the lens of energy externalities in production and consump- tion activities, and on policies to correct these. Population dynamics in those models is typically taken to follow exogenous trends. Yet population growth is a key component of projections of future emissions. Population is expected to rise to around 9.8 billion by 2050, and climate economists must include the environmental consequences of individu- als' reproductive decisions into their analyses. In this paper, we study the interactions between climate change and population dynamics. We develop an analytical model of endogenous fertility and embed it in a calibrated climate-economy model. The social op- timum can be implemented through carbon pricing policies and policies aiming at smaller families. Population without family planning policies peaks at 12 billion, while optimal family planning brings the peak back to 9 billion. If family planning cannot be addressed as a separate policy instrument for climate policies, carbon taxes need to be lowered. Our results present family planning as an integral part of climate policies and quantify the costs of neglecting the interaction. Keywords: fertility; climate change; population; carbon tax; family planning; climate- economy models.
    [Show full text]
  • ECON 782: Economics of the Family Instructor Course Overview
    UMass Amherst, Fall 2013 ECON 782, Murray-Close ECON 782: Economics of the Family Fall 2013 Monday 1:00-3:30 Thompson Hall, Room 919 Instructor Marta Murray-Close Office: Thompson 1018 E-mail: [email protected] Telephone: 413-545-3412 Office hours: Mo 9:30-10:30, Th 1:30-2:30, and by appointment Course overview This course provides an introduction to the \economic" approach to family re- search. I put \economic" in scare quotes because we will take as our point of departure a particular economic approach: the rational choice approach pio- neered by Gary Becker in his Treatise on the Family and related work. We will examine the assumptions underlying rational choice models of family behavior, assess the plausibility of those assumptions, and discuss whether and to what extent rational choice models can help us understand the form and function- ing of families. We will also examine critiques of the economic approach from feminist, sociological, and other perspectives. You may already have an opinion about rational choice models in general, the application of rational choice mod- els to the family in particular, or Gary Becker. By the end of the semester, you may or may not have changed your opinion, but you will be a more nuanced and sophisticated fan or critic than many commentators on the family. Family economics is a fascinating field because it touches on issues with which we all have personal experience and because it provides theoretical and empirical insight into current controversies over modern families. This class will ask and
    [Show full text]
  • Household Economics III
    UNIVERSITÄT HOHENHEIM INSTITUT FÜR HAUSHALTS- UND KONSUMÖKONOMIK Lehrstuhl Haushalts- und Konsumökonomik sowie Genderökonomik Alfonso Sousa-Poza Household Economics III WS 07/08 Course Syllabus Goals This course builds-up on Consumer and Household Economics I and II by taking a more in-depth look at the topics discussed in previous semesters. The course is composed of two parts: the first part of the course will take an in-depth look at household dynamics with special emphasis being placed on the consumption and savings decision, intergenerational financial transfers, skill acquisition, fertility issues, and the allocation of time over the lifecycle. This part of the course will be based on William A. Lord’s “Household Dynamics: Economic Growth and Policy”; Oxford University Press (2002). The second part of the course will focus on original journal contributions, both theoretical and empirical, that deal with the allocation of resources and time, resource allocation within households, and marriage, divorce and fertility. The aim of this second part is to enhance students’ ability to understand original journal articles and position them in the appropriate theoretical framework. Stated somewhat differently: to move beyond well-prepared textbooks and into the realm of (often) condensed, complex, and specific research. Course Requirements The course will follow a lecture format. Students are expected to participate in the lectures by asking questions or providing additional insights into the literature. While you will not be formally graded on your classroom participation, I cannot overemphasize the importance of asking questions and probing new idea as an essential mode of learning. I expect students to read these papers.
    [Show full text]
  • Unpaid Labor and the Critique of Political Economy in Home Economics and New Household Economics: from the Feminist Economics Perspective
    Series: Women and Economics〈 2〉 Unpaid Labor and the Critique of Political Economy in Home Economics and New Household Economics: From the Feminist Economics Perspective Nobuko Hara Abstract: This paper investigates the relationship between home economics and new household eco- nomics. In particular, I consider what is “new” in new household economics from the feminist economics perspective. Home economics was established in the 1920s and 1930s by Hazel Kyrk, Margaret Reid, and Elizabeth Hoyt, while new household economics was established in the 1960s by Jacob Mincer, Theodore Schultz, and Gary Becker. Before the 1960s, main- stream economics concentrated on production for the market. Later, the mainstream economi- cs of the family culminated in Becker’s new household economics. The family, within which unpaid labor is carried out mostly by women, again became an important topic in feminist economics in the 1990s. In this paper, I focus on the theoretical meaning of unpaid labor in these two Chicago schools, home economics and new household economics. I insist that new household economics is not “new” in terms of its approach and method. Rather, its novelty is in the domain of the application of standard microeconomics to the household. I firstly ex- plore the feminist economics perspective. Secondly, I discuss the theoretical meaning of the analysis of unpaid labor in home economics. Thirdly, I examine new household economics from the methodological point of view and policy implications. I then conclude by discussing the relationship between these two Chicago schools. JEL classification numbers: B00, B41, B54. I Introduction: Feminist Economics Perspective An analysis of the family organization and unpaid household labor, particularly care labor, has always been a critical issue in feminist economics.1 In this sec- tion, I clarify the viewpoint of this article.
    [Show full text]
  • Department of Economics Working Paper
    Department of Economics Working Paper A Road Not Taken? A Brief History of Care in Economic Thought By John B. Davis and Robert McMaster Working Paper 2019-02 College of Business Administration Forthcoming in European Journal of the History of Economic Thought A road not taken? A brief history of care in economic thought1 John B Davis* and Robert McMaster** *Amsterdam School of Economics, University of Amsterdam, PO Box 15867, 1001 NJ Amsterdam, and Department of Economics, Marquette University, PO Box 1881, Milwaukee, WI 53201-1881 E-mail: [email protected] **Adam Smith Business School, University of Glasgow, University Avenue, Glasgow G12 8QQ. E-mail: [email protected] Abstract Care is central to the human experience and part of the social provisioning process. Adam Smith recogniZed this, associating care with sympathy. Later contributions in the political economy tradition also provide scope for an analysis of care, but none as developed as Smith’s. With the emergence of the current mainstream, care is marginaliZed. Kenneth Boulding’s analysis provides an opportunity to interrogate care in the economy, but he fails to explicitly acknowledge care. It is left to feminist economics to highlight the centrality of care. An implication is that it challenges the conventional rubric of economic organization predicated on self-interest. Keywords: care; Smith; feminist economics; Boulding; social provisioning JEL Classification: B10; B54; I00; Z00 1 We wish to acknowledge the highly insightful guidance and friendly criticisms of the editors and three reviewers of this journal. We have no doubts that they greatly improved the paper’s analysis and argument.
    [Show full text]
  • On the Taxation of Private Transfers
    ISSN 1936-5349 (print) ISSN 1936-5357 (online) HARVARD JOHN M. OLIN CENTER FOR LAW, ECONOMICS, AND BUSINESS ON THE TAXATION OF PRIVATE TRANSFERS Louis Kaplow Discussion Paper No. 665 03/2010 Harvard Law School Cambridge, MA 02138 This paper can be downloaded without charge from: The Harvard John M. Olin Discussion Paper Series: http://www.law.harvard.edu/programs/olin_center/ The Social Science Research Network Electronic Paper Collection: http://ssrn.com/abstract=1551470 On the Taxation of Private Transfers Louis Kaplow* Abstract This essay considers the appropriate conceptual framework for assessing the taxation of private transfers to individuals. Although it is conventional to emphasize the role of estate and gift taxation or inheritance taxation in redistributing income from the rich to the poor, the revenue effects of transfer taxation, and its distortionary effect on labor supply and savings, it is suggested in line with some recent work that the dominant focus should be on positive and negative externalities attributable to giving. The fundamental reason is that transfer tax reform can be combined with adjustments to other aspects of the fiscal system, notably the income tax, so as to keep constant most effects other than externalities. JEL Classes H21, H23, H24, K34 8 Louis Kaplow. All rights reserved. *Finn M.W. Caspersen and Household International Professor of Law and Economics, Harvard Law School, and Research Associate, National Bureau of Economic Research. I am grateful to Wojciech Kopczuk for extensive discussions pertaining to the final topic addressed in subsection III.B.4 and to the John M. Olin Center for Law, Economics, and Business at Harvard Law School for financial support.
    [Show full text]
  • Essays in Family Economics
    Essays in Family Economics Inaugural-Dissertation zur Erlangung des Grades Doctor oeconomiae publicae (Dr. oec. publ.) an der Ludwig-Maximilians-Universität München 2014 vorgelegt von Lisa Stadler Referent: Prof. Dr. Robert Fenge Korreferent: Prof. Dr. Andreas Haufler Promotionsabschlussberatung: 05. November 2014 Datum der mündlichen Prüfung: 24. Oktober 2014 Namen der Berichterstatter: Robert Fenge, Andreas Haufler, Christian Holzner Acknowledgments Writing this thesis has been an inspiring and challenging time. Its completion would not have been possible without the support of numerous people to whom I would like to express my deep appreciation at this point. My first and foremost gratitude goes to my thesis supervisor Robert Fenge. I highly appreciated his academic advice and encouragement during the preparation of this thesis. He was very encouraging, inspiring, and helpful in choosing my topic and getting started at the beginning of my doctorate. Later, he gave me the freedom to pursue my research interests and was always willing to discuss new ideas and thoughts. I am also very grateful to Andreas Haufler for kindly agreeing to become my second advisor and to Christian Holzner for joining my dissertation committee as third examiner. My research benefited a lot from their constructive hints, comments, and proposals during the Public Finance and Economic Policy Seminar. During the course of writing this dissertation, I highly appreciated the inspiring discussions with my colleagues and the participants of the Public Finance and Economic Policy Seminar. In particular, I would like to thank Nadjeschda Arnold, Florian Buck, Wolfgang Habla, Dominika Langenmayr, Mohammed Mardan, Ulf Maier, Kerstin Röder, Marco Sahm, and Daniel Singh.
    [Show full text]
  • Household Behavior and Family Economics - Olivier Donni
    MATHEMATICAL MODELS IN ECONOMICS – Vol. I - Household Behavior and Family Economics - Olivier Donni HOUSEHOLD BEHAVIOR AND FAMILY ECONOMICS Olivier Donni Université de Cergy-Pontoise & THEMA, Cergy-Pontoise, France Keywords: Family Economics, Household Behavior, Good Demand, Labor Supply, Domestic Production, Unitary Approach, Collective Approach, Strategic Approach, Consensus Model, Rotten Kid Theorem, Intra-household Bargaining, Identifiability, Testability, Slutsky Matrix, Income Pooling Contents 1. Introduction 2. The Behavior of Single-Person Households 2.1. The Model of Goods Demands 2.2. The Model of Labor Supply 2.3. The Model with Domestic Production 3. The Behavior of Multi-Person Households 3.1. Preliminary Distinctions 3.1.1. Consumption and the Nature of Goods 3.1.2. The Form of Preferences 3.1.3. Preference Factors and Distribution Factors 3.1.4. What Can Be Observed? 3.2. The Unitary Approach 3.2.1. The Dictatorial Model 3.2.2. The Consensus Model of Samuelson 3.2.3. The Rotten Kid Model of Becker 3.3. Empirical Evaluation of the Unitary Approach 3.4. The Strategic Approach 3.5. The Collective Approach 3.5.1. Characterization – Testability 3.5.2. Welfare Analyses – Identifiability 3.5.3. Reduction of the Collective Model 3.6. Bargaining, Threat Points and Outside Options 4. Marxist andUNESCO Feminist Perspectives – EOLSS Glossary Bibliography Biographical Sketch SAMPLE CHAPTERS Summary This chapter presents the most important models of household behavior. The introduction gives an overall picture of the literature. The first part of the text is concerned with the behavior of single-person households. The classical models of goods demand and of labor supply as well as their extension to domestic production are discussed here.
    [Show full text]
  • Marriage and the Family in Economic Theory and Policy
    Copyright © 2006 Ave Maria Law Review MARRIAGE AND THE FAMILY IN ECONOMIC THEORY AND POLICY Maria Sophia Aguirre† INTRODUCTION Human beings are social by nature; the most basic manifestation of this sociability is the family.1 In his article, Alfonso Cardinal López Trujillo underlines the reality that man is a social being who is naturally oriented toward the family—family based on the natural unit of marriage. Marriage, the union of a man and a woman, generates children. Marriage in itself establishes the beginning of the family community.2 A community is something radically different from considering “family members separately” 3 or as a sum of isolated individuals living together by simple chance or biological reasons. Rather, a community is “a social subject,”4 “a unit into which all the members of the family are integrated.”5 It follows from this view that an understanding of either marriage or the family that converts a relationship between persons into an exchange of “things” or “objects” is not fitting to them. A person normally comes into the world within a family, and it is there where he develops, grows, and matures into an adult capable of being a productive member of society.6 † Dr. Maria Sophia Aguirre, Professor, Department of Economics and Business, The Catholic University of America 1. The ancient Greeks already addressed this issue. See, e.g., ARISTOTLE, THE NICOMACHEAN ETHICS, Bk. VIII, Ch. 12 (H. Rackham trans., rev. ed. 1999). 2. Alfonso Cardinal López Trujillo, The Nature of Marriage and its Various Aspects, 4 AVE MARIA L. REV. 297, 305 (2006).
    [Show full text]