Independent Individual Decision-Makers in Household Models and the New Home Economics

Much of the recent literature in household economics has been critical of unitary models of household decision-making. Most alternative models currently used are bargaining models and consensual models, including collective models. This paper discusses another alternative: independent individual models of decision-making that don't make any specific assumptions of jointness of decision-making in households. Unitary models are typically associated with Gary Becker even though most of Becker’s own analyses of the family did not use his unitary model. This is especially the case with the specifically independent individual models presented in his theory of marriage. Decision-making models assuming independent individual household members in the Becker tradition are reminiscent of models of labor markets in which firms and workers are independent decision-makers. As basis for econometric estimations, such models may be preferable to models imposing the structure of a game or a household welfare function.unitary model, household model, Gary Becker, marriage, labor

How "Chicagoan" are Gary Becker's Economic Models of Marriage?

This paper describes Gary Becker’s theoretical models of marriage. At the micro-level, these are all rational choice models. At the market level, Becker offers two major types of models: partial equilibrium models based on Price Theory as taught by Marshall and Friedman and optimal sorting models based on optimal assignment models. The paper examines some of the possible intellectual influences on Becker’s theory of marriage, compares Becker’s research on marriage with that of some scholars interested in intra-marriage distribution, and documents that Becker’s students at Chicago were more interested in Becker’s Friedmanian models of marriage than in his optimal assignment models.

Becker’s Theories of Marriage and the Shrinking Role of Demand and Supply Models

This paper argues that Gary Becker has been a leader in the economics of marriage not only as a pioneer but also as a leader who influenced the work of other economists who entered this field over at least two decades. A comprehensive survey of economic research on marriage is presented for the years 1970-1993. A distinction is drawn between earlier entrants and later entrants, the dividing line being 1980, coinciding with the publication of Becker’s seminal Treatise on the Family. In his first article on marriage in the JPE in 1973, Becker gave more prominence to Demand & Supply [D&S] models than he later did in the Treatise. It appears that a similar movement away from D&S models is observed among later entrants. This is but one indication of Becker’s leadership in the economics of marriage in the period 1980-1993. Other indications are also discussed.

Marriage Markets and Married Women’s Labor Force Participation

Based on a model that views men and women as participants in competitive markets for women’s home production time, we predict that the scarcer women are relative to men, the less married women are likely to participate in the labor force. The magnitude of this effect is expected to depend on married women’s educational attainment. We use time series for four U.S. regions to test our prediction. As hypothesized, we find that an increase in the growth rate of the sex ratio results in a decline in the labor force participation growth rate of married women. However, the sex ratio effect is attenuated the greater the growth rate in college-educated wives.

Will Women Save more than Men? A Theoretical Model of Savings and Marriage

This paper presents an inter-temporal model of individual behavior with uncertainty about marriage and divorce and which accommodates the possible presence of economies or diseconomies of scale from marriage. We show that a scenario of higher marriage rates and higher divorce rates will be associated with higher savings rates in the presence of economies of marriage and with lower savings rates in the presence of diseconomies of marriage. In the context of traditional gender roles, this implies higher saving rates by young men and lower saving rates by young women than in less traditional countries, the opposite being the case with saving rates of married women relative to those of married men. We establish the relevance of traditional gender roles and marital status to understanding cross-country variation in gender differentials in savings behavior.savings behavior, marriage, divorce, economics of marriage, gender roles

Income Pooling and Household Division of Labor: Evidence from Danish Couples

If income pooling indicates primary earners' willingness to trade part of their income with spouses who earn less and work more in household production, then among specialized couples income pooling will be positively associated with the price of commercial domestic services, substitutes for household production. In line with our prediction, analyses of data from a unique Danish household survey show that complete income pooling is more frequent where commercial domestic services are more expensive.home production, income pooling, household finance, domestic services

On the Economics of Marriage - A Theory of Marriage, Labor and Divorce. Out of print. Published originally by Westview Press in 1993 under name Grossbard-Shechtman

This book presents a theory that integrates marriage markets and labor markets (Part 2). She uses data, primarily from Israel and the United States, to predict the effects of particular factors, such as individual resources and market size, on individual and market labor supply and marital outcomes, including bargaining power, polygamy, marriage contract, divorce and fertility. Parts 3 and 4 consider some implications of the theory for the study of sex ratio effects and compensating differentials in marriage. Part 5 provides further applications to the study of cohabitation, divorce, and polygamy. Part 6 examines how a spouse's help increases a person's human capital. The approach is interdisciplinary, combining aspects of sociology, demography, and anthropology, as well as economics

Repack the Household: A Response to Robert Ellickson’s Unpacking the Household

I challenge the notion that households can be reduced to housing units. Ellickson, a law professor, overemphasized the desirability of ownership from the perspective of capital accumulation. Ownership is also important to the household members who do the work that maintains the household, including production of meals, homemaking, childcare, eldercare, and other essential functions of households. Discouraging home ownership by those who manage the details of such essential activities, and who need more rather than fewer incentives to engage in household production, is placing more nails in the coffin of advanced industrialized societies

On the Economics of Marriage - A Theory of Marriage, Labor and Divorce.

This book presents a theory that integrates marriage markets and labor markets (Part 2). She uses data, primarily from Israel and the United States, to predict the effects of particular factors, such as individual resources and market size, on individual and market labor supply and marital outcomes, including bargaining power, polygamy, marriage contract, divorce and fertility. Parts 3 and 4 consider some implications of the theory for the study of sex ratio effects and compensating differentials in marriage. Part 5 provides further applications to the study of cohabitation, divorce, and polygamy. Part 6 examines how a spouse's help increases a person's human capital. The approach is interdisciplinary, combining aspects of sociology, demography, and anthropology, as well as economics

Repack the Household: A Response to Robert Ellickson’s Unpacking the Household

I challenge the notion that households can be reduced to housing units. Ellickson, a law professor, overemphasized the desirability of ownership from the perspective of capital accumulation. Ownership is also important to the household members who do the work that maintains the household, including production of meals, homemaking, childcare, eldercare, and other essential functions of households. Discouraging home ownership by those who manage the details of such essential activities, and who need more rather than fewer incentives to engage in household production, is placing more nails in the coffin of advanced industrialized societies