India-bound!

It’s (almost) official! I think I actually have a ticket and am leaving for India and the Philippines for the rest of the summer on Friday. I’ll post updates here as the mood strikes me, but feel free to follow @ekfletch and @EPoDHarvard on twitter for more frequent (and perhaps less related) content (pictures of all the momos I’m going to eat? Anyone?).

For now, I’ll leave you with the World Bank’s new project to determine the economic cost of child marriage, a well-funded, but really huge undertaking:

What is the economic cost of child marriage? We don’t really know. Studies – including those by the World Bank – suggest a range of negative impacts of child marriage on human development outcomes. For example, Bank staff have estimated that in sub-Saharan Africa child marriage may account in some countries for up to one-fifth of drop-outs among girls at the secondary level, and each additional year of delay in the age of (child) marriage could potentially increase the likelihood of literacy and secondary school completion by several percentage points for the affected girls. Another study published a few years ago in the Journal of Political Economy suggests similar impacts in the case of Bangladesh.

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Gender norms, roles, unequal pay, and heterogeneous effects

The Economist has a nice summary of a new paper by Marianne Bertrand, Emir Kamenica, and Jessica Pan, which is forthcoming. An excerpt of the Economist article is below.

The paper offers some hints as to why women who could outearn their husbands choose not to work at all, or to work less. For instance, norms affect the division of household chores, but economically in the wrong direction. If a husband earns less than his wife, she might rightfully expect him to take on some additional responsibilities at home. In reality, however, if she earns more, she spends more time taking care of the household and their children than otherwise similar women in comparable families, who earn less than the husband. One wonders whether such women feel compelled to soothe their husbands’ unease at earning less.

I’m in the midst of reading the paper right now, and my first thought was that this is an incredible stretch. In econometrics, a significant problem in estimation is the problem of unobserved heterogeneity. It makes sense to think that on average, married women are different than single women, that women who choose to have children are different than women who choose not to have children, and finally, it should makes sense that men who marry women who earn more than them are likely different than men who marry women who earn less than them.

I can certainly imagine that some women would be inclined to “soothe their husbands’ unease at earning less,” but it seems that the men who were particularly sensitive to such things wouldn’t marry a woman with greater income or greater earning potential. This is, in fact, what they find, that women who work are less likely to marry a man who earns less, and thus partially explains the decline in marriage rates in the US. It also drives much of their results on divorce, which they see as arising out of the unequal division of labor in the household due to this “soothing effect.”

It appears to be a very thorough paper, though I’m skeptical of the instrument–men’s and women’s industry-specific wage distributions–being uncorrelated with unobserved characteristics that lead to more gender-equitable matches.

Based on the industry composition of the state and industry-wide wage growth at the national level, we create sex-specific predicted distributions of local wages that result from aggregate labor demand that is plausably [sic] uncorrelated with characteristics of men and women in a particular marriage market.

This is the instrument used by Aizer (2010) in her paper on the effect of an increase in women’s wages on rates of domestic violence. Though a subtle distinction, I find her use of the instrument much more plausible due to the much lower prevalence of hospitalization-inducing violent events versus marriages where the woman earns more, which the Bertrand paper cites as about one quarter of the marriages in their sample. It seems that these wage distributions actually would be correlated with the characteristics of men and women in a labor/marriage market.

Betsey Stevenson and Justin Wolfers on why we study families

I’m often asked why my research is economics and not sociology. Justin Wolfers and Betsey Stevenson give one answer as part of a longer Q&A on their research:

Your other areas of research focus include marriage, divorce, and family. Why would these areas interest economists? Or business leaders?

Dr. Stevenson: Economics is about how people make decisions optimally, given that they’re facing constraints. That framework can be applied anywhere, not just to things that are about dollars and cents and the economy. Families and labor markets are intimately connected, and to understand one, it’s helpful to understand the other. That’s because decisions about labor force participation and about what kinds of jobs to take and what kind of hours to keep are made within the context of family lives. What happens in families affects the way people make those kinds of decisions. And what happens in labor markets affects the decisions people make about families. Economists are also interested in families because we have come to realize that there are many parallels between family and labor markets.

Dr. Wolfers: The first place that people notice the similarities between family and economics is in what some have called the marriage market, which looks a whole lot like the labor market. People search for partners the same way they search for jobs. When you find a spouse or a job that looks like a good fit, you take it. And you must make a decision about how much time to spend searching for the perfect spouse or the perfect job before accepting a job or a spouse.

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Is Marriage for White People?

I stopped by the Gettysburg College Library last week to pick up a book I’d asked them to purchase. I have to say, one of my favorite parts of this professor gig is that I can ask the library to buy any book I want. And then, it’s not only there for me to read, but for everyone else, too! I love libraries.

While thumbing through the new arrivals at the library, I spotted Ralph Richard Banks‘ book is Marriage for White People? and immediately thought, well, this is something I have to read. Much of the research I’ve done has underscored how marriage and domestic partnerships have changed significantly over the past few decades, and the issues of race and class are incredibly salient in that transformation.

Unfortunately, the book takes quite awhile to get going. The first several chapters paint the status of black women and men in America in incredibly broad strokes. Banks’ prose is easy and accessible, but there’s nothing particularly exciting about it. The subject matter is interesting, but he spends so much time laying down the framework for what he’s going to do that I’d recommend skipping the first few chapters if you have any familiarity with the subject matter. And by familiarity, I mean you’ve ever had a conversation with someone (white, black, Latino, etc) about a) high rates of incarceration for black males, b) increasing educational attainment of women, and c) how cultural expectations of marrying up make being single and educated difficult.

There are several gems, however, throughout the book. In places, he illuminates surprising and insightful comments from his interviewees. He speaks powerfully to the concept of a “mixed marriage” and how it might be incredibly different than it is often portrayed. Marrying “down” in education, income, or class, but in education particularly, might actually consist of a more difficult-to-navigate marital arrangement because of the difference in cultural values. More than being black or not.

The last few chapters, where Banks explores more in depth the ideas he presents in the first few chapters, are enjoyable, eye-opening, and insightful.

Still, I find Banks’ ultimate conclusions slightly disturbing. At the end of the day, he is a man telling black women that in order to save marriage, they need to marry outside the black community. While it certainly makes sense in the light of his book, I have to believe that a black woman might interpret his recommendations differently.

The weight of the world…

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Back to Becker

Two weeks ago, this blog got more hits in a day that it had during the entirety of its existence (~8 months). It wasn’t a big number relative to other blogs, for sure, but it was really exciting for me. Thanks for stopping by and reading and a particular thanks to Modeled Behavior and Brad DeLong and others for tweeting that post.

While it’s still hard to know exactly who is reading this (hi, Mom!), wordpress does give me an idea of where the clicks are coming from. One source that seemed to pop up a lot after the big day was the blog of a New Zealander who took issue with my characterization of Becker. He essentially argues that painting Becker’s ideas as antiquated can be quickly undone by releasing the gender constraints from the model. Let men do the laundry, essentially, and let women do waged work.

It’s a compelling proposition, but I believe the problems with applying Becker’s model go much deeper than the gender role issue. Changes in marriage and the resulting decrease in the usefulness of Becker’s models are a result of rather significant demographic and policy shifts. While there are certainly families who continue to operate under a strict separation of labor that leads to one partner earning wages and one staying at home, this is a rapidly diminishing proportion of American families, regardless of there is a male or female partner performing a particular gender role. Simply, fewer people are getting married, more and more women are having children out of wedlock, and divorce rates remain very high.

Specialization on the home/waged work divide is really only beneficial to both parties when the time horizon is unlimited, i.e., a marriage lasts a long time; or there’s so much inequality in the match that the low-earner has a high probability of being sufficiently taken care of if the match ends. It’s particularly damaging when partnerships end and the one who has foregone market labor is suddenly without compensation for household work in a world that (in almost all circumstances) demands at least some level of capital. Marriages, these days, don’t last that long, at least on average. This makes the risks of specialization much higher, particularly for one performing the unwaged work.

If you want to claim that “modern couples” specialize on a lesser level–say one does the laundry and one does the cooking–as a result of comparative advantage, you don’t reap the gains from complete specialization that are what make the Becker model tick. And, correct me if I’m wrong as I’m not a trade economist, but hasn’t the comparative advantage model pretty much been debunked?

Outsourcing is a solution, yes, when the two parties in a marriage have similar levels of human capital, similar desires to work, or face constraints such that raising a one-income family is impossible. But that doesn’t exist in Becker’s framework and I don’t think it jibes with the idea of domestic production. Once you add in a third person whose primary purpose is domestic production (child-rearing, cleaning, cooking, etc), the two-person model of production then becomes a model of consumption. The couple use their earnings to buy childcare, housecleaning, meals made, etc, in exchange for more leisure.

Interestingly, Justin Wolfers on Monday on twitter claimed himself as an exception to a recent paper claiming that male academics did less parenting than their female partners. While I applaud him for taking control of his parenting, he has a third person in the mix. He and his partner employ a nanny full-time to take care of their child. I don’t doubt that he’s presenting himself honestly, but I wonder how much of the equal parenting is a result of having a nanny, and how it might change if he didn’t. He says himself in the NYT profile that having the nanny allows him and his partner to do fun things with their daughter, like coloring, instead of fighting over getting dressed. Again, it comes down to shared consumption, rather than shared production.

So no, I don’t think you can generalize Becker, or bring him into the 21st century, by taking out the gender component. There’s just much more to it than that.

On Shared Consumption

Last week, I wrote about the economics profession’s new “power couple”, Justin Wolfers and Betsey Stevenson, and mentioned the idea of shared consumption driving marriage rather than shared production. In the comments, Katina asked me to explain shared consumption a bit more in depth and I promised her a longer post on the matter. I’m a little late, but here it is. I haven’t formally modeled any of this, and so I’ll say it’s not very clearly thought out, but in the name of elucidating the inner workings of this economist’s mind, I figured I’d at least outline my thoughts here.

One of the perhaps more complicated ways to define shared consumption comes from the study of public goods. Public goods are things like national defense or clean air. They constitute things that are non-excludable and non-rivalrous in consumption. There’s a lot of buzz words in that sentence, but just think about things that you can enjoy (or gain utility from) without diminishing someone else’ enjoyment (this is the non-rivalrous part) and things that, once they are in existence, no one can easily prevent someone else from enjoying it, say through an entrance fee (this is the non-excludable part).

Shared consumption goods are a little less strict than this, however. The idea of shared consumption lets us take what we would normally call “private” goods (non-public, like shoes–we both can’t wear the same pair of shoes) and give them some public (or sharing) aspects within a marriage or partnership.

A big shift in family economics has been to examine children as a public good. See, for instance, Chiappori, Iyigun and Weiss. The idea is that two people investing in a child reap benefits from both their own investment and the other’s investment. But this is a little convoluted for a non-economist, maybe.

Perhaps even simpler is when we take children out of the equation. Many couples these days marry without any intention of having children, even if though it might mean paying more in taxes. Two-earner households aren’t specializing in household production by one staying at home to cook and clean while the other works, but rather enter into a marriage for the purpose of keeping each other company.

To back me up, the New York Times published a piece outlining a significant demographic shift in parenthood over the past few years. Namely, more than half of children born to mothers under 30 are born to single mothers. If that’s not a refutation of shared production, I don’t know what is. This is a theme that is also prominent in my new favorite ethnography (not so new, really, but if you ever want to see me get really excited, ask me about Promises I Can Keep).

In addition, I’m currently reading Is Marriage for White People? by Ralph Richard Banks of Stanford Law. Early on, he cites a Pew study that says shared religious beliefs, shared interests, a healthy, happy sexual relationship and even sharing household chores were more important for a happy marriage than children. We’re not getting married to have children, necessarily, anymore, and when we are, we’re not convinced that specializing in raising the child is the best thing for one parent to do.

As pertaining to children, there’s a fine line between what constitutes consumption and production, but I think it’s safe to say that most matches aren’t happening with the primary purpose of building a home with a white picket fence in the suburbs and raising a couple of kids who go on to do the same. Americans are marrying to make themselves better off still, just not in the way that our parents and grandparents did.

For Valentine’s Day, on love and marriage and economics

Perhaps I’m hyper aware of things going on in both media and social media these days, but it seems that UPenn economists Justin Wolfers and Betsey Stevenson are everywhere these days. They’re all over my twitter feed for one. Then, today this came out in the Washington Post, and over the weekend, out came a profile in the NYT. The Times article describes them as a ‘power couple’ of economics. Which is pretty funny if you know any economist couples.

Though our research hasn’t come head to head yet, Justin and Betsey do a lot of work in family economics, much like I do. So, their meteoric rise to national prominence (at least among the WaPo-, NYT-reading set, is of interest to me. In particular, someone mentioned a quote from Betsey Stevenson saying that the household problem (as we so lovingly call it in economics) had turned from one of shared production to shared consumption.

Much of the dominant thinking in family and household economics has roots in Gary Becker’s A Treatise on the Family. It rests on ideas that can only politely be called antiquated. Women are in charge of domestic production (cleaning, child-rearing, cooking, laundry, etc) and men are in charge of bringing home the bacon. It’s specialization at the household level. Very economist-y. On some level, it probably made a lot of sense to think about marriage in this manner, particularly when women’s wages were much, much lower than men’s. In fact, it made so much sense that it partly earned Becker a Nobel Prize in Economics.

At some point during my fourth year of graduate school, I ordered my own copy. It was a simple (though really expensive!) purchase. A paperback, just a book, but a book that essentially formed much of the dominant thinking in my field. Even then, I knew its time in the spotlight was waning. I’ve still never read the whole thing. Despite knowing it was a classic, I can still only look up passages when I think they’re relevant. Reading more than a few pages makes the feminist in me absolutely boil.

But someone else recently said that, as economists, we should hope that our research becomes irrelevant, because that means that society has changed or that we’ve developed policy solutions for those questions and problems. And that’s probably what is happening here.

The world is changing; marriage is changing, love is changing. Household production is definitely changing. And perhaps all of this is about household consumption (enjoying kids and raising them together) rather than household production (raising kids, a public good). I’m unsure whether this is true at every socio-economic level, or whether it’s a privilege of high-earners, but it’s certainly an interesting way to frame and model marriage in economic terms.

Happy Valentine’s Day!