Economics of the family

A customary gender division of labor is one in which women and men are directed towards certain tasks and/or explicitly prohibited from performing others. We offer an explanation as to why the gender division of labor is so often enforced by custom, and why customary gender divisions of labor generally involve both direction and prohibition. Our model builds on the literature on the marital holdup problem, and considers both problems in choice of specialty and human capital acquisition in a framework in which agents learn a variety of skills and must search for a marriage partner on the marriage market. We show that wasteful behavior may emerge due to strategic incentives in career choice and human capital acquisition, and that both problems may be mitigated through the customary gender division of labor. We find, however, that a gender division of labor is not Pareto-improving; one gender is made worse off. Both the distributional effects and welfare gains to a customary gender division of labor decrease as opportunities to exchange in markets increase.

A recent trend in Korea and Japan sees college-graduate women marrying later and at lower rates than less-educated women. In China, "leftover women" have also become a top policy concern. This paper finds however that China's higher-educated urban women attain marital outcomes more like those in the US than in the other Asian Tiger countries, marrying later, but ultimately at comparable rates to less-educated women. For 1990-2009, we quantify marriage quality using the classic Choo-Siow (2006) estimator and find large returns to marrying later but minimal direct higher education effects. Using the Choo (2015) dynamic estimator, we project future marriage rates to remain stable among the higher educated and to decline for lower-educated women.

This paper argues that the economics of the family can be much enriched by incorporating recent developments in evolutionary biology, animal behavior studies, cultural evolution, anthropology, and game theory. Evolutionary foundations of sympathy between relatives are explored. Applications of the theory of cultural evolution to the demographic transition and to wealth transfers between generations are investigated. The economics of marital institutions such as polygyny, polyandry, and matriarchy are discussed, as well as recent work by economists on non-monogamous mating arrangements in our own society. Applications of recent developments in non-cooperative bargaining theory and matching theory to the theory of marriage are presented.

We examine how charitable giving is influenced by who in the household is primarily responsible for giving decisions. Looking first at single-person households, we find men and women to have significantly different tastes for giving, setting up a potential conflict for married couples. We find that, with respect to total giving, married households tend to resolve these conflicts largely in favor of the husband's preferences. However, when the woman is the decision maker, she will still make a significantly different allocation of those charity dollars, preferring to give to more charities but to give less to each. We find our results give new insights into both issues of charitable giving and household decision making.

This paper argues that the economics of the family can be much enriched by incorporating recent developments in evolutionary biology, animal behavior studies, cultural evolution, anthropology, and game theory. Evolutionary foundations of sympathy between relatives are explored. Applications of the theory of cultural evolution to the demographic transition and to wealth transfers between generations are investigated. The economics of marital institutions such as polygyny, polyandry, and matriarchy are discussed, as well as recent work by economists on non-monogamous mating arrangements in our own society. Applications of recent developments in non-cooperative bargaining theory and matching theory to the theory of marriage are presented.

Alice and Bob live in the forest. To sustain themselves, they collect fruits and berries and snare an occasional animal. The nights get cold, but Alice is a skillful fire-builder. Bob has never mastered this art. His fires fizzle and he never seems to collect the right kind of wood. Alice divides her time between collecting food and gathering wood. She does this in such a way that her marginal benefit from time spent collecting food is the same as that from gathering wood. Bob does not attempt to build fires. He spends all of his time gathering food, and every night slinks up and huddles beside Alice's fire. Bob appreciates the fire's warmth, but wishes it were larger. Bob has learned to leave morsels of food by the fire for Alice. Warmth and food are both "normal goods" for Alice. The extra food that Bob leaves induces her to increase her total food consumption, but not by the total amount that Bob leaves for her. She uses some of the time saved by Bob's gifts to gather more firewood.

If person i preferred a bundle z; that cost no more than ii, then (z1, ... , z', ... en) would be Pareto superior (2l,... , n) and would satisfy the household budget constraint. Notice that because of the linearity of the household budget constraint, this result does not require the assumption of convex preferences. The full utility possibility frontier is the outer envelope of these conditional utility possibility frontiers. Each point on the utility possibility frontier corresponds to some Pareto efficient allocation. In this example, a necessary and sufficient condition for an interior Pareto efficient allocation is that the sum of marginal rates of substitution between public and private goods is 1 and that the allocation satisfies the household budget constraint, xi tx2+y = W. The sum of marginal rates of substitution equals 1 when y = x1/2+3x 2 /2. It follows from these two equations that y = W/2 + (x 2-xi1)/4 at any Pareto optimal allocation (x 1 , x 2 , y). Therefore different points on the utility possibility frontier correspond to different quantities of y. Since the slope of the utility possibility frontier has been shown to be-y, the utility possibility frontier is not be a simplex. A simple example of a household with transferable utility and two goods is the following. Consider a two-person household with one private good and one household public good. Suppose that the household has a fixed amount of wealth W to spend, and that it can buy private goods at a price of 1 or public goods at a price of p. Then the set of feasible aggregate consumptions is S = {(x, y) > 0Iz + py W}. Suppose that each consumer's utility function takes the special (quasilinear) form U(x;, y) = x + f;(y), where f;'(y) > 0 and fl'(y) < 0. The first-order necessary condition for an interior Pareto Optimum is that the sum of marginal rates of substitution between public and private goods is p. (Samuelson (1954)).5 Since utility is linear in private goods, this condition is simply fi(y*) + f2(y*) = p, which has a unique solution for y* since f;'(y) < 0 for all y. Any allocation (x1, x 2 , y*) > 0 such that x 1 + x2 + py* = W will be Pareto optimal. Bergstrom and Cornes (1981), (1983) find general conditions under which economies with public goods have transferable utility. Their results as applied to two-person households are that a (essentially) necessary and sufficient condition for transferable utility is that preferences of each household member are representable by a utility function of the form Ui(xi, y) = f(y)x; + gi(y), where x, is the amount of the private good received by person i and y is the vector of public goods in the household. This functional form includes the special case of quasilinear utility where U,(x,, y) = x, + f,(y). It also includes the case of identical Cobb-Douglas utility functions as well as cases where preferences are not identical and household demand for public goods is responsive to income. Households in which preferences satisfy the Bergstrom-Cornes condition have the following special properties: " All points on the utility possibility frontier that correspond to interior Pareto optima are achieved with the same amount of public goods, y = y*. " The conditional utility possibility frontiers UPF(y) and UPF(y'), corresponding to any two different quantities of public goods y and y' will not cross each other. One or the other of these two frontiers lies strictly to the northeast of the other. * The unique amount of public goods that corresponds to interior Pareto optimal allocations can be found by choosing (x*, y*) to maximize U1(xi, y)+ U 2 (x 2 , y) = x + fi(y)+ 5 An interior Pareto optimum is one where each consumer has positive consumption of private goods and there is a positive amount of the public good. There are boundary optima in which one consumer has no private goods and where the Samuelson condition is not satisfied. This is explained by Bergstrom and Cornes (1983) and in more detail by Campbell and Truchon (1988).

In this paper we sketch a theory about the role of supernatural beliefs in incentivizing "good" behavior among children by parents. We present a simple theory on the production and the use of certain supernatural beliefs by parents to influence their children's behavior. A prime example of this is the idea of Santa Claus and the idea that Santa Claus rewards children according to how well they have behaved during the year. We show that under standard conditions parents face a time inconsistency problem when trying to incentivize their offspring. We claim that the production of beliefs in certain supernatural or quasi-supernatural persons who allegedly have infinite lives can help parents discipline their children. Finally, we extend this logic to a community and its ruler or rulers. We show that rulers can have incentives to influence the beliefs of their subjects. This incentive is greater whenever the ruler is a monopolist and when he or she expects to rule for a long period. Rulers with limited ability and/or superior technology for producing beliefs will also supply more supernatural stories to enforce their rule.

Economic theory has made several attempts at integrating the Kantian categorical imperative. Mark D. White recently proposed such an analysis. This is a comment on his article. Our commentary on White's article shall be presented through two distinct sections. We shall first discuss the status of obligations and then finally link the debate to the philosophical question of internalism.

The present paper develops a theoretical model of labor supply with domestic production and public goods. The objective of the paper is to deal simultaneously with these two aspects and thus consider a good that is both produced within the household and publicly consumed by household members. In the present work, this good is represented by the quality and quantity of household children. In particular, we are interested in the cost of children and in the way this cost is shared between parents. The total cost of children is made both of time and money, in the sense that it is defined as a market consumption cost plus the remuneration of parental time devoted to take care of children. These theoretical considerations are followed by an empirical application using French data (EDT).

We construct a model of household decision-making in which agents consume a private and a public good, interpreted as children&#39;s welfare. Children&#39;s utility depends on their human capital, which depends on the time their parents spend with them and on the parents&#39; human capital. We first show that as returns to human capital increase, couples at the top of the income distribution should spend more time with their children. This in turn should reinforce assortative matching, in a sense that we precisely define. We then embed the model into a transferable utility matching framework with random preferences, à la Choo and Siow (2006), which we estimate using US marriage data for individuals born between 1943 and 1972. We find that the preference for partners of the same education has significantly increased for white individuals, particularly for the highly educated. We find no evidence of such an increase for black individuals. Moreover, in line with theoretical predictions...

I examine charitable giving behaviors by married and permanently cohabiting couples.
  Looking first at differences between married, cohabiting, and single households, I find that married couples are more likely to give and to give more than other groups, especially to religious organizations. I then look at specific couples over time, examining particularly those who transition from cohabitation to marriage, and find that though couples who will eventually get married are predisposed to giving even before their marriage, their giving increases after marriage in a way not explained by changes in income or other relevant independent variables. This change is explained in large part by differences in households' income elasticities of giving across couple groups and over time. I also check the responsiveness of permanently cohabiting couples' giving to changes in the tax-price of both household members, and show that their giving responds only to changes in the higher earner's marginal tax rate.
  The results suggest a connection between the commitment mechanism of marriage and investment in the household public good of charitable giving.

Labor market presence of cancer survivors has been significantly improved as medical technology revolutionized cancer-specific diagnoses and treatments. However, less understood are post-cancer variations in job market outcomes of racial and ethnic minorities in the US. Using a theoretical framework derived from family labor supply decision models and taking advantage of the rich data in the 2008-2014 Medical Expenditure Panel Survey (MEPS), this study employs a double-hurdle empirical model of labor force participation and hours worked to evaluate the employment decisions of Black and Hispanic cancer survivors. Hispanic and Black breast cancer survivors were less likely to be employed by 4% and 7.5%, respectively, when compared with Whites. Black prostate cancer survivors were 8% less likely to work than Whites, with insignificant differences between Hispanic and White prostate cancer survivors. Once employed, Black and Hispanic breast cancer survivors worked an extra 4 and 6 hours than Whites, while Hispanic prostate cancer survivors worked 5 fewer weekly hours than Whites. In addition, our estimates indicate the significance of job types in labor market outcomes post-cancer. Employment of minorities in blue collar or service occupations decreased employment hours of survivors. Labor market disparities for minorities amplifies the socioeconomic and familial burden of cancers. This timely work motivates informed public policy to reduce unexamined consequences of chronic conditions among minorities. JEL code: I1, J15, J22, J71

Per ridare linfa alla natalità non bastano assegni per i figli più generosi, un fisco più leggero o misure più incisive per favorire la conciliazione casa-lavoro. Ogni sforzo deve fare i conti con una cultura che ha trasformato i figli in un bene desiderato ma non primario, a volte un lusso, altre un optional. In questo senso la denatalità può essere considerata un sintomo della crisi del capitalismo?

In this paper we sketch a theory about the role of supernatural beliefs in incentivizing " good " behavior among children by parents. We present a simple theory on the production and the use of certain supernatural beliefs by parents to influence their children's behavior. A prime example of this is the idea of Santa Claus and the idea that Santa Claus rewards children according to how well they have behaved during the year. We show that under standard conditions parents face a time inconsistency problem when trying to incentivize their offspring. We claim that the production of beliefs in certain supernatural or quasi-supernatural persons who allegedly have infinite lives can help parents discipline their children. Finally, we extend this logic to a community and its ruler or rulers. We show that rulers can have incentives to influence the beliefs of their subjects. This incentive is greater whenever the ruler is a monopolist and when he or she expects to rule for a long period. Rulers with limited ability and/or superior technology for producing beliefs will also supply more supernatural stories to enforce their rule.

This article examines the phenomenon of thought insertion, one of the most extreme disruptions to the standard mechanisms for self-knowledge, in the context of Kant's philosophy of mind. This juxtaposition is of interest for two reasons, aside from Kant's foundational significance for any modern work on the self. First, thought insertion presents a challenge to Kant's approach. For example, the first Critique famously held that " The 'I think' must be able to accompany all my representations " (Kant, KrV, B132). Yet thought insertion raises the problem of representations which are 'mine' by many natural criteria, and yet which I am unwilling to self-ascribe. Ultimately, my argument will be that thought insertion simultaneously problematises, and yet to some degree also vindicates, the complex distinctions between activity and passivity which underlie Kant's system. Second, I argue that Kant's position contains resources that allow us to model thought insertion, and its broader implications for self-knowledge, in an interesting and distinctive manner. Kant himself held an extreme view of philosophy's competence in the study of mental disorder: in the Anthropology, he suggests that courts must refer such cases to philosophers, rather than medics (Kant, Anth, p.214). My aim is much more modest: to suggest that a Kantian treatment of thought insertion deserves consideration by both philosophers and clinicians.

Economic theory has made several attempts at integrating the Kantian categorical imperative. Mark D. White recently proposed such an analysis. This is a comment on his article. Our commentary on White's article shall be presented through two distinct sections. We shall first discuss the status of obligations and then finally link the debate to the philosophical question of internalism.

Fixed costs play a crucial role in current models of foreign direct investment (FDI), yet they are almost entirely ignored in empirical treatments of FDI. We fill this gap by using a 1989–2001 panel of FDI flows into Iceland to examine the determinants of fixed costs for multinational firms and how these influence aggregate patterns of investment. Our additions to research in the field include usage of several natural-resource variables, and the analysis of data on initial entry of FDI into a developed country. We use the Heckman two-step procedure, which allows us to account for fixed costs and their impact on estimation.Taken together, we find that the standard OLS approach to the data incorrectly links the quantity of FDI to source-country variables while in fact most of their role is in determining whether FDI takes place at all.

This paper applies the panel fixed effects with vector decomposition esti-mator to three FDI data sets to estimate the impact of time-invariant variables on FDI while including fixed effects. We find that the omission of fixed effects significantly biases the results, leading to contradictory predictions regarding the effect of trade costs and culture across data sets. After eliminating these biases, the differences across data sets largely disappear and many time-invariant variables consistently indicate the importance of vertical FDI. This suggests that some controversies in the literature may be driven by the extent to which unaccounted fixed effects biases vary across different data sets. JEL no. F14, F23

We present a model with pre-marital schooling investment, endogenous marital matching and spousal specialization in homework and market production. Investment in schooling raises ages and generates two kinds of returns in our framework: a labor-market return and a marriage-market return because education can affect the intra-marital share of the surplus one can extract from marriage. When the returns to education and household roles are gender neutral, men and women educate in equal proportions and there is pure positive assortative matching in the marriage market. But if men and women have different market returns or household roles, then there may be mixing in equilibrium where some educated individuals marry uneducated spouses and those who educate less extract a relatively larger share of the marital surplus. The existence of large and frictionless marriage markets creates competition among potential spouses, precludes bargaining and generates premarital investments that are efficient. Given that the gender wage gap narrows with the level of education, women's labor-market return from schooling is higher than that of men. Moreover, women's household time obligations have declined over time, raising their marriage-market return from schooling. Combining these two effects, we explain why women now attain higher schooling levels than men. JEL Classification:

We present a model in which couples first match in the marriage markets and, on the basis of their relative spousal endowment levels, decide whether to have children, specialize in market production or homework and determine their intra-household allocations. After couples' marriage match qualities are revealed, better-matched couples stay married and poorly-matched couples separate. A spousal education or endowment gap encourages couples to have children and specialize. The presence of children lowers the likelihood of divorce but the impact of children on the propensity to divorce is smallest among middle-income couples. The reason is that the latter react the least to changes in their marital status in making household allocations. Regardless of their marital status, high-productivity mothers go back to work after they have children. However, low-productivity, divorced mothers also go back to work if they had been married to low-productivity men who cannot support their offspring in separation. As the gender education or endowment gap narrows, couples tend to specialize less and have fewer or no children. These choices in turn feedback into a lower marital surplus and a higher likelihood of divorce. Thus, our model indicates that the spousal endowment or education gap can by itself account for the patterns of spousal specialization, the decision to have children, the likelihood of divorce, and the transfers between the spouses in divorce.

The paper develops a theoretical model of labor supply with domestic production and public goods. The objective is to deal simultaneously with these two aspects and thus consider a good that is both produced and publicly consumed by household members. This good is the quality and quantity of children. We focus on the way the cost of children is shared between parents. The cost of children is made both of time and money, including all goods and time bought at market prices for children and the value of parental time devoted to children.

Family is the base for the production of human and social capital. This wisdom is generally acknowledged by the sociology, but it's hardly acceptable by the economic paradigma, despite some spectacular findings in the near past (e.g. by Gary Becker). Notwithstanding it appears that family is a giantic economic sector, which produces great part of the ouput.

Economists who study the family acknowledge the importance of altruism and resource allocation that occurs between family members, and have developed a number of novel approaches to modelling this behaviour. This article suggests a new method, based on the moral philosophy of Immanuel Kant, which will highlight several unique features of intrafamily altruism. After summarizing Kant’s ethics and how it can be incorporated into the standard economic model of choice, I show how Kantian concepts of perfect and imperfect duty cast the standard models of intrafamily altruism and resource allocation in a new light. The inclusion of duty into the modelling explains how altruistic behaviour can continue when the affection has left a marriage, and blurs the lines between cooperative and non-cooperative models of resource allocation by highlighting the importance of binding commitment without external enforcement.

The article examines the concept of human person and the moral behavior attached to this concept from the point of view of philosopher Immanuel Kant. The difference between individual and things, and the capacity of humans to recognize universal moral duties are tackled. It demonstrates that the duty of self-respect is the primary factor that influences moral action. The problem regarding the regaining of self-respect is explored.

As most economists will tell you, markets, under ideal conditions of perfect competition, maximize the allocative and productive efficiency of the economy. Those ideal conditions are familiar to introductory economics students, and include large numbers of buyers and sellers, perfect information about the prices and terms sellers offer, homogeneous products, and no barriers to entry (or exit). If any of these conditions do not hold, then efficiency is compromised, and government intervention (such as price regulation and antitrust measures) is often recommended in order to bring the outcomes of the imperfectly competition closer to the ideal of perfect competition.