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The History and Economics of the Family: A Guest Post

When I tell my non-economist friends that I do research on the “economics of the family,” they often look puzzled. (The funniest response comes from those who think that this is the same as “home economics“; as Betsey Stevenson will tell you, I surely would have failed home ec.) But Tim Harford is a lifesaver, and his new book provides a wonderful primer on how economists think about family life and what we have learned from this line of research. Fortunately, a chapter has just been excerpted by Slate, so you can read more here and here.

One of the fun things about this field is getting to talk to sociologists, demographers, gender studies folks, lawyers, and historians. The history of the family is endlessly fascinating, and it is truly amazing how the institution has evolved over the centuries. Let me recommend an absolutely fascinating survey of this history by Stephanie Coontz, available here (summarizing her excellent book, Marriage, A History). Go back and click on that link. Her essay is a must read for anyone interested in understanding the family.

Coontz shows quite convincingly that there is nothing traditional about our usual understanding of “traditional marriage.” Her essay is the focus of an online symposium asking “Can Marriage Survive?” Betsey and I were asked to write a short response, and we took this as an invitation to re-read Coontz’s historical narrative through the lens of economics. You can read our essay here, but let me describe the gist of our argument.

On the “traditional” role of families:

[F]amilies have always played a role in “filling in” where incomplete market institutions would otherwise have hindered economic development. For example, even in the absence of well-functioning contract law, families found ways to enforce agreements among kin. This naturally gave the family a role as an organizing device for economic activity, and the limits of the firm often coincided with the limits of the family. … Similarly, prior to the expansion of the welfare state, the family had been a key provider of insurance, as spouses agreed not only to support each other “through richer, through poorer, in sickness and in health,” but also extended this guarantee to parents, children, and siblings. Before modern credit markets arrived, access to capital was often facilitated through family ties. … A number of goods and services, such as freshly-cooked meals or childcare, were historically not sold in the market sector. Thus, the family became the firm producing these household services.

While the words above are ours, the influence of Gary Becker on our thinking should be pretty obvious. But we argue that things are changing:

The forces shaping family life have changed with the development of the market economy. An increasingly sophisticated system of contract law has made possible enormous economic benefits, but in the process the modern corporation has come to supplant the family firm as the key unit of production. The development of social insurance has spread greater security to many but has reduced the role of the family as a provider of insurance. Most recently, technological, social and legal changes have reduced the value of specialization within households.

In light of these changes, we suggest that economists need to develop a new – dare we say post-Beckerian? – model of the family:

So what drives modern marriage? We believe that the answer lies in a shift from the family as a forum for shared production to shared consumption. In case the language of economic lacks romance, let’s be clearer: modern marriage is about love and companionship. Most things in life are simply better shared with another. … The key today is consumption complementarities – activities that are not only enjoyable, but are more enjoyable when shared with a spouse. We call this new model of sharing our lives “hedonic marriage.”

A more politically charged response to Coontz’s essay come from Kay Hymowitz, and a different perspective comes from Norval Glenn. I’m never a fan of mixing advocates with academics, and you will definitely see differences in style. I suspect that we professors are generally less persuasive, but our facts are more often true. Online discussion of this topic will continue throughout the coming week.

UPDATE: If you would prefer to see this post summarized as a cartoon, click here. (And yes, Betsy and I love playing on our Wii.)