Submitted To:

Prof. Rasnanda Panda

Prepared By:
Lalwani Kavita (B-31) Rutvi Shah (B-54)

I don't care how poor a man is; if he has family, he's rich Dan Wilcox
Economists

focus on the household - a residential unit - members pool resources welfare of all consist of family members linked by blood or marriage or share resources Small Factory

 MARRIED NUCLEAR FAMILIES

COHABITING FAMILIES SINGLE-PARENT FAMILIES STEPFAMILIES JOINT/SHARED-CUSTODY FAMILIES GRANDPARENT-LED FAMILIES FAMILIES HEADED BY

ADULTS OF THE SAME SEX FOSTER AND GROUP-HOME FAMILIES COMMUNITY FAMILIES COMMUTER FAMILIES

 Neoclassical

function"

"unified household preference

assumption of altruism in the family "outcome" as a function of inputs from outside the household, disregarding decision-making inside the household Ignored self-interest

Bargaining

Model

Used when there is conflict Person with more bargaining power wins "the perception of contribution" and "the perception of self-interest affects the bargaining power

 Household

work and market work Related to utility function of the individuals within the family Women =>comparative advantage in household work Men=> comparative advantage in market work Specialization

unable to fetch decent wage later on Dependent Financial insecurity to women => domestic violence

Malthusian Theory

human populations grow exponentially (i.e., doubling with each cycle) other factors remain constant Equilibrium wage rate People married early when wages above equilibrium and later when wages below equilibrium.

Population

=> Wages

Neoclassical Theory
Real GDP per person grows because of technological progress, which increases the productivity of capital and labor. Increase in labor productivity increases wages which leads to growth in population. exogenous technological progress failed Technology /capital-labour ratio => per capita income /wages

New Growth Model

Malthus + Neoclassical Added focus on investment in human knowledge and skills

in investment per child => better quality children => Growth in Economy

 Parental

altruism or love Altruism per child is negatively related to number of children Resources (Earnings and time) with parents

Own consumption Cost of rearing children Number of children Dependency Capital bequeathed to children

Considering

 Negative

relation between fertility and per capita income Answer is NO Cost of bringing up children and value of time spent by parents is high As per capita income and capital-labor ratio is high, it encourages more investment per child Good learning and education Returns on investments in Human Capital increases

Marriages, births and other family behavior respond to fluctuations in Aggregate output and prices Moved with business cycle Birth rates became countercyclical after married women entered labor market Long run effect Marriages=> births => supply of labor => aggregate output => increase in GDP

 Parents

value children who support them during their old age Cost of raising children Reduces demand for children Government spending

The household and family structures in industrialized countries changed dramatically in recent decades Decline in marriages Marry late Divorce

Blue married red divorced

The household and family structures in industrialized countries changed dramatically in recent decades Decline in marriages Marry late Divorce
Increase

in married female labour force participation

blue-USA red Spain

The household and family structures in industrialized countries changed dramatically in recent decades Decline in marriages Marry late Divorce Increase in married female labour force participation
Increase

in female educational attainment

blue-usa red spain

The household and family structures in industrialized countries changed dramatically in recent decades Decline in marriages Marry late Divorce Increase in married female labour force participation Increase in female educational attainment

Increase in assortative mating people are more likely to get married to someone who is similar to them Correlation between the educational attainments of husbands and wives increased (us: 0.41 in 1960 and 0.52 in 2005) Decline in fertility

The household and family structures in industrialized countries changed dramatically in recent decades

Decline in marriages Marry late Divorce Increase in married female labour force participation Increase in female educational attainment Increase in assortative mating

people are more likely to get married to someone who is similar to them Correlation between the educational attainments of husbands and wives increased (us: 0.41 in 1960 and 0.52 in 2005)

Decline in fertility

Increase

in births outside of marriage

Do these changes matter at all?

 Children:

family background and childrens

outcome Inequality: single mother households are much more likely to live in poverty Labour markets: labour supply behaviour of single earner and two earner households can be very different Public policy: on an average countries use about 20% of their GDP on public social spending

Marital status Married female labour supply Increase in female education TECHNOLOGY Improvement in household technologies skill biased technological change rise in skill premium decline of gender wage gap

 Fertility

and flexibilty Fertility and permanent or temporary contracts

TAHNKYOU!! & WELCOME TO THE WORLD OF FAMILY ECONOMICS!!