Gary Becker was right, part six: The family

Becker introduced the family into economic thinking and economic calculation into family life.  He spotted that a family is a miniature economic system like a small factory.  The basic goods it produces are things such as meals, residence, and entertainment.  The costs of these goods are compounded not only of the costs of their input, but include the time spent on producing them.  Since the family interacts with the wider economy including the place of work, there will be trade-offs between the two.

As real wages at work increase, it becomes relatively less attractive to spend time producing some of the family goods.  Some of these will be outsourced, buying in what was once done at home in order to free time for more valuable activity.  Examples include buying home-delivered pizzas or paying tailors to repair garments that used to be mended at home.  Sometimes people turn to outside institutions such as nurseries and schools to take over some of the activity that was once performed within the household.

Sometimes domestic production will become more capital intensive as work wages rise, with people buying labour-saving machines such as vacuum cleaners, washing machines and dishwashers.  The rise in the value of time at work has made domestic time relatively less efficient without them.  In place of the traditional dichotomy between work and leisure, Becker looked at the switch from more to less time-intensive production of home goods.

Becker noted some of the consequences of the large-scale entry of women into the workforce.  The wages they could earn at work made them less ready to spend as much time on domestic activity such as child rearing and childcare.  This provides an economic interpretation of the widely-observed decline in the fertility of societies as their economies develop.  Becker also thought it lay behind rising divorce rates in advanced societies.

Becker made a major contribution to our understanding of how families allocate time and assign tasks to the various members, so much so that we now routinely attempt to estimate the likely social and domestic impact of ongoing economic developments.