Gia Elise Barboza

Institutional and Behavioral Economics, AEC 810

Professor A. Allan Schmid, Fall Semester 2002

THE POLITICAL ECONOMY OF PARENTHOOD

I. Abstract

This paper uses the Structure-Situation-Performance paradigm (Schmid 1989; 2002) to explore alternative institutional arrangements to marriage and child rearing that differentially affect the gendered distribution of resources and wealth maximization in family relationships. The coercive loss of freedom that has resulted from the sexual division of labor and woman’s exclusion from the economic sector demonstrate how gender asymmetries are constructed and contested both within the family and beyond. Impact analysis is employed analytically to explore the inherent characteristics of household “commodities” and the various interdependencies that inevitably arise, not only between individual family members but also among family members and society in general. Asymmetries between family members are analyzed not only in the context of the division of labor and resources between women, men and children but also in the informal institutions that ascribe various statuses to each respectively. Further, different aspects of intra-familial gender bias are demonstrated to reveal biases in economic policies that aggregate the sexes consequently discounting the needs of women and children in many instances. It is posited that these gender biases in the household are revealed in ideas and representations that find their etiology in the human brain. Familial relations are both constituted by and help constitute these practices and ideologies that are in turn reflected in other institutions in the social hierarchy. Empirical evidence from a variety of case studies suggests that, in many regions of the world, there are persistent intra-family inequalities as well, that affect wealth distribution within, as well as outside of, the family.

II. Introduction: Legal and Economic Perspectives of the Family

a. Economic Definitions of Family

Economic thought has been hesitant to incorporate family life into its mainstream. (Becker 1981). Beginning in the 1950s, economists turned their attention to family behavior and began to theoretically examine how the rules of the market govern the consumption, production and welfare of family members and the structure of family life[i]. The household, as the unit of analysis, was conceptualized as a residential unit whose members pooled their resources to provide for the welfare of all[ii]. Households consisted mainly of family members linked primarily by blood and kinship ties, and only occasionally consisting of non-related individuals.

Recent economic discourse holds that the household is an undifferentiated unit, a system of exchanges, entitlements and responsibilities allocated among members in a group[iii]. Empirical studies have demonstrated the existence of conflicting preferences and interests among individual family members and differential abilities to pursue and realize those interests. (Jones 1983). Simplistic assumptions that families are in harmonious agreement or consensus regarding the use of household resources (Samuelson 1956), or that each household has one altruistic member who works things out for the benefit of all (Becker 1974; 1981), have been rejected.

b. Legal Definitions of Family, Marriage and Parent

What constellation of people, connected through what kinds of relationships count as a family under the law? In the United States, the Supreme Court has held that a person’s decision about how to conduct family life rises to the level of a fundamental right. (See, for e.g., Loving v. Virginia). Importantly, it is family relations, not the right of individuals to choose with whom they live, that the Court has honored with “fundamental rights” status[iv]. The legal definition of “family” looks to whether official rules of family formation -- marriage, birth, adoption -- have been followed. This definition fails to acknowledge more extended family ties or groups of people who may function like a family even without complying with official legal practices[v]. For example, the Court’s rhetoric notes that “history” supports a broader definition of family when the individuals are related by blood but requires a narrow definition, for example, in cases involving homosexuals[vi] (see, Bowers v. Hardwick).

III. The Mating Market – A Case of High Transaction Costs

a. High Information Costs and Uncertainty

Searching for a mate in the “mating market” is a high information cost good between potential spouses. While searching for a mate, each spouse, uncertain of how committed the other spouse will be, must be concerned with the ultimate level of commitment the other spouse will achieve. If partners choose each other for rational reasons, it is plausible that they might leave each other for those same reasons. As time passes, boundedly rational individuals will adopt various standard operating procedures, which cause them to be display affection in uncalculating and unconditional ways so that commitment will not waiver (i.e. be “blinded by love”)[vii]. In his acknowledgment of this fact, Frank (1988) argues that love is a solution to the commitment problem. He argues that evolution has installed in the human brain reward “mechanisms” that keep individuals from performing activities that would ordinarily lead to successful reproduction.

Empirically, Buss (2002) studied 115 different actions that signal whether a person is in love. He found that, of those behaviors that measured commitment, talking about marriage or expressing a desire to raise a family were foremost on people’s list. “The most salient acts of love signal the commitment of sexual, economic, emotional and genetic resources to one person.” Theoretically, love is a good characterized by high contractual costs and uncertainty because love is manifested behaviorally in ways that are costly to both men and women. Moreover, once the desire for love exists, it can be manipulated. For example, men in American society often deceive women to gain short-term access to sexual relations. In turn, women have evolved defenses against being sexually exploited, such as imposing longer courtships prior to consenting to sex, attempting to detect deception and the ability to decode non-verbal gestures. Irrespective of these evolutionary adaptations, humans are often incompetent to understand difficult situations, (see Heiner, C-D gap) making it impossible to detect those individuals who will fall out of love with us.

Consider the familiar story of a woman, initially chosen for her attractiveness, who is dumped when reaching a certain age. Twenge (2002) states that “the need to belong and have close relationships is a fundamental human motivation.[viii]” Her recent study purported to explain why people tend to engage in behaviors they otherwise would not after a break-up, she claims that those who have been rejected tend to adopt unhealthy and self-defeating behaviors afterwards. This is a fundamental aspect of how the brain works. Therefore, from a socio-economic perspective, because “getting dumped” can have severe consequences, evolution has equipped the human brain with a “mechanism” that delivers pain when we experience mating failure. Consequently, the institution of marriage functions to “tie our hands to the mast.” (Schmid 1987;2000)[ix].

b. Contract Costs

The same logic of contractual relationships that applies between capitalists and workers or between slave owners and slaves applies to those relationships between men and women. (Braunstein and Folbre 2001). Moreover, because men have historically been entitled to claim a property right in women and children, the same contractually based problems that arise between principle and agents are likely to arise. (Braunstein and Folbre 2001). For example, contractual arrangements provide wives and children with economic security. Moreover, women can often threaten to withhold “labor” (i.e. sex) or leave if they are not given a larger stake in the economic decision making of the household[x].

The conventional view of the male-female bargain is that a man will provide food and security for a woman and her children if he can be assured that the children are biologically his. In return, in monogamous societies, a woman will raise his children. As between women and men, a woman’s unpaid labor is a specific asset (Williamson 1985). Wives, who devote themselves to raising children, develop asset specific skills that are less portable and more likely to depreciate over time. (England and Farkas 1986). The loss in asset value from a change in demand (Schmid 2000) either as the children approach legal age or because of changed economic circumstances or divorce, is an ex ante loss which women will try to avoid if she has options. (Schmid 2000). As transacting parties, women and men will bargain for various safeguards to protect the value of the woman as a specific asset. Existing social structures would imply that men would like the option to desert an old wife if a “new one comes [along that is] better” (Schmid 2000) but will “forgo it to obtain today’s best” option. The female wants assurances that the male will provide high levels of parental investment and economic security. If this bargaining falls apart, it is easy to see how in a situation of specific assets with uncertainty a woman would be forced to stay in a marriage, even one that is violent[xi]. Becker (1981) argues that high levels of specialization invite shirking because members carry on their functions separately. He states that monitoring to prevent shirking is an invasion of privacy and issues surrounding control might be a source of diseconomies of scale. Low (2002)[xii] argues that women have started to shift from offering just reproductive value in the “mating market” to offering a combination of reproductive and resource value in the form of employment and education. The strength of a woman’s “fallback position” or threat point is a crucial factor that affects her bargaining position. An improvement in the person’s fallback position in terms of employment and educational opportunities would lead to an improvement in her ability to deal with her husband in the household. Much of the feminist economic literature argues that, this bargaining process “spills-over” into the market place. Externalities are ubiquitous. SO and so (I did it again here, if you can believe), however, notes that there may be a trade-off. As women invest in their careers and their education, they are waiting longer to reproduce and the consequence is that they lose in the evolutionary game of survival. After running a series of complex calculations, simulating the various life paths of women who have the same number of children but start at different ages and with differing levels of social, physical and human capital, researchers have found that the proportion of both poor and wealthy “late reproducing” women decline. Similarly, cohabitation, which provides men with the opportunity to enjoy the benefits of marriage without giving up their independence[xiii], has been found to contribute to the delay in marriage among men[xiv].

The dynamics of family formation varies across differing physical and social ecologies, and, if we imagine alternative marriage institutions, the idea of bargaining to obtain assurances over asset specific goods is limited in application. (Schmid 2000). For example, in countries that allow for arranged marriages, women and men do not have the real opportunity to bargain and obtain assurances for the recovery of specific assets. (Schmid 2000). Pinker (1997) and Harris (1974) both posit that legal monogamy has not really been an agreement between men and women, but rather between powerful men. The reason: monogamy tends to minimize the cost of competition among producers (men). (Pinker 1997). In monogamous societies, if there are more women than men who want to marry, the rent from marriage accrues to men and vice versa. (Becker 1981). Choosing between monogamous and polygamous institutions often depends on whether resources, for example, cows and arable land, can be monopolized by male kin-based coalitions. (Geary and Flinn 2001). In polygynous societies, coalitions of related males cooperate to gain access to and maintain control of the resources that women need to rear children. (Geary and Flinn 2001). As an alternative structure to monogamy, which is similar to Williamson’s concept of “hostage”, we can (very tenuously, perhaps) analogize polygamous systems to Williamson’s “firm hierarchy”.

Ecological conditions, such as quantity, type and distribution of food and other resources also appear to be casually related to marriage patterns and family structure. (Geary and Flinn 2001). In societies who practice polygamy, women control marriage and other aspects of social life and have multiple partners to spread the responsibilities of child rearing. (Geary and Flinn 2001).

In a study of central Java by Hull (1982), female autonomy in the domestic domain has been widely recognized. The Javanese believe that husband and wife should work together as a team. For example, Hull found that 75% of married couples agreed with the statement, “In general, females are more clever than males.” Gertz (1961) observed that in Java, wives make most of the household decisions. The relatively high status of women can be linked to the system of kinship ties and the system of farming. Kinship organization is bilateral and matrifocal. (Gertz 1961). Also, since men and women are equals in terms of agricultural production, the status of women is higher than that of, for example, African women, who tend to be the primary agricultural producers. This fact is related to their practice of monogamy, because polygyny, while it is legally sanctioned, is not economically attractive when women do not form the primary labor force in South-East Asian agriculture.

Pinker (1997) states that in a free society, polygyny is not necessarily bad for women because co-wives often share child care duties, (with the consequence that sometimes jealousies among sub-families erupt). Becker (1981) shows how an effective ban on polygamy can hurt women by reducing their share in full income that includes the value of non-market commodities. Control of material resources, such as land or cattle, results in resource-based polygyny. Absent legal restrictions, men who intend to marry many females attempt to acquire social and material resources but can only do so with the cooperation of other male kin and prospective brides. Importantly, in the course of human evolution, competition for social status, power and access to and control of resources would favor a large brain and greater social competencies.

c. Parental Investment as a High Exclusion Cost Good

Parent-offspring conflict begins in the womb. (Pinker 1997). As between mother and growing fetus maternal resources (parental investment) are incompatible use goods. The fetus “grabs” as much of its mothers resources as it can at the expense of her ability to bear future children. (Pinker 1997). Pinker posits that parents of all species face the choice of whether to continue to invest in a newborn after it is born. He notes that women in all cultures let infants die in circumstances when the odds of survival are low. Emotions of new mothers may be instrumental in the decision to let the child live or die. These emotions have their origins in the postpartum hormones that are produced in a new mother’s brain. To answer the question of whose interests count, we turn to the emotional response called “bonding” which creates in women the lifelong attachment to the child. Institutions matter in determining whether or not the child will be allowed to live [xv]. Once children are allowed to live, they are a high exclusion and MC=0 goods between individuals in the society where that child lives. The issue becomes, who pays and who determines quality?

Schelling states, “There is no presumption that self-serving behavior of individuals should usually lead to collectively satisfactory results.” In 1979, the Chinese government, worried that run-away population growth would devour China’s scarce resources of food and water, articulated a tough one-child policy. China’s attempt to impose a “stopping rule” is a good example of a class of “patterns that have the characteristic of tending to be realized in the aggregate no matter how the individuals behave who comprise the aggregates.”

Like Schelling, the Chinese government has recognized that the skewed birth ratio[xvi] is seriously alarming in more ways than one. This policy, along with Chinese traditions and modern medical technology, has combined to create a demographic nightmare threatening China’s stability and endangering political freedom. China currently faces a situation where, over the next two decades, as many as 40 million young Chinese men will not be able to marry because there will not be enough females in the population[xvii]. Men who are not able to find spouses have resorted to sexual crimes such as forced marriage, bigamy, visiting prostitutes and adultery. This is becoming a social trap (Platt 1974) that began with the traditional Chinese preference for boys over girls. The only way out of the trap is through collective action which depends on the cooperation of others. (Schmid 2002). Trust is a learned behavior, but it for the Chinese, trust is limited to individual family members. (Grief 1994) Consequently, unless current institutional practices change, collectively desirable results will be very difficult to achieve.

Harris (1974) suggests that under some circumstances, women could reverse the sex ratio to favor females against males if it was in their interest to do so. However, he notes that it is often in a woman’s interest to raise more boys than girls. The higher ratio of men to women among the Yanamamo, for example, means more protein per capita (because men hunt) and a slower rate of population growth. It also, however, results in more warfare and violence. His answer for why females have not been taught the “technology of aggression” is because the Yanamamo use the sexual deprivation strategy to enhance their ability to fight and teach males to be brutes. This strategy, however, would not work with women. This is because of a male chauvinist social system that expropriates sexual rewards and allocates them to aggressive males. It is not an articulation that the males are inherently more aggressive. Harris (1974 citing Chagnon) locates the cause of violent outbreaks among Yanomamo men in disputes over women, who are outnumbered by men by 120 to 100. A parent’s preference for male children leads to a system whereby males must bear the burden of conflict and the result is that women are coerced into raising large numbers of males. Male supremacy is a case of positive feedback (Arthur 1990): the fiercer the males, the more sexually aggressive they become. (Harris 1974).

Mace and Sear (2002) analyzed demographic information from rural Gambia that was collected from 1950 to 1974, when child mortality rates in the area were very high. The anthropologists found that for Gambian toddlers, the presence of an elder female cuts the chances of dying by one-half. Likewise, Jamison studied records from a village in central Japan spanning the years from 1671 to 1871. As in the Gambian study, she found the overall mortality rate for children was substantial, with 27.5 percent of children dying by age 16. She determined that when a maternal grandmother was present, boys were 52% less likely to die in childhood and when a paternal grandmother was present, the figure rose to 62%. Several theories have purported to explain this phenomenon. Maternal grandparents are certain that their grandchildren are their blood relations, and are more willing to invest, financially and emotionally, in the offspring. Other explanations posit that the flow of financial resources from old to young is uni-directional and that differential survival rates result from this greater resource flow.

The research of Urie Bronfenbrenner (1990) emphasizes the importance for a child's development of being raised in a household in which there are at least two adults who are committed to the child. According to Bronfenbrenner (1996), “the rising developmental disarray of children is the product of marked and continuing changes, taking place over the same time period, in the social institutions and informal structures that have greatest impact on the development of competence and character in the next generation.” Among the most consequential of these social changes are the following: (1) a decline in the involvement of parents as active participants in and mentors of activities with children and youth; and (2) an increase in the percentage of children and youth living in poverty. The fact that these things are happening at the same time has suggested covariation between them.

While the notion two parents are better than one has an inveterate tradition in psychology-related disciplines, it is necessary to consider different situations that lead to alternative structures where the performance outcomes are different. Researchers have, for example, qualified Bronfenbrenner’s thesis as dependent on the race of the child. A recent study done by researchers at Cornell University and the University of Utah, tracked a nationally representative sample of 1,560 children ages 10-14 for more than one decade to determine how family structure, including cohabitation and racial differences affect delinquency and math scores. They demonstrated that black children do just as well, both socially and academically, in single parent homes as they do in two parent homes. Their study suggests that while policies that promote marriage may benefit white children, they are likely to have little or no effect on black children. Likewise, Chant's (1991) research on Mexican youth found that children in female-headed households appeared to be more mature and responsible, an outcome he attributes to early participation in household activities. Chant concludes that single-parent structures are often the outcome of a positive choice by women and whether or not this is the case, that family life becomes more secure and stable, with some desirable equitable characteristics. By carefully specifying the situation then, it is easy to understand that children are better off in two-parent families only of certain conditions hold.

A father’s investment in child care has been shown to be more significant for child development than the physical environment. (Hwang, Lamb and Broberg 1989). Moreover, families with a high degree of paternal investment are more cohesive. The intimacy of the father’s role, in turn, has been linked to the degree of modernization. In Nigeria, fathers enjoy playing with their children, but only if they regularly live with the child. “Modernization” within the family has been characterized by living arrangements. In monogamous marriages, fathers live in the same house as the mother and children all the time, but more affluent men are inclined to have more than one wife, which has implications for child development. These proximal processes are perhaps the most important factor in shaping the attitude of social relationships. For example, the mother-child bond is very important in Japanese society. Japanese mothers encourage their children to follow rules and to conform to social norms (Bornstein 1991). In contrast, parents in the United States are taught to encourage independent exploration of the environment. Eastern parenting styles and the emphasis placed on feelings of dependence and emotional obligation have profoundly influenced socio-economic development there. Whereas in many circumstances modernization and economic development act to produce changes in family ties and traditional values that bind relatives together, the East Asian countries have an unusual degree of family stability because of their Confucian tradition which values, inter alia, group orientation, harmony and authority. The downside is a lack of personal choice and individuality.

It is scientifically impossible to have more than one biological parent. However parenting is a social as well as a biological process. (Lerner, et. al 1995) The Bari people of Venezuela, for example, have adopted the informal institution of partible paternity, which is the belief that it takes more than one act of intercourse to conceive a child. In these societies, all men who have sex with a woman during her pregnancy contribute to the formation of her baby and may assume social responsibilities for the child after its birth. Contrast this institution with the U.S., where, the inherent uncertainty of parentage creates a situation where men do not accept responsibility for a child where the mother has been found to be “sleeping around.” Beckman (2002) has shown that there is a strong correlation between the status of women in society and the benefits of multiple paternity. They found, for example, that among the Bari, 80% of children with two or more “official” fathers survive to adulthood, compared with 64% with one father. These figures can be contrasted to the neighboring Curripaco, a male dominated culture, where children of doubtful parentage are outcast and frequently die young.

d. Women’s Household Labor As An Incompatible Use Good

The idea that “free” markets work to expand income, wealth and economic opportunities incorrectly assumes that the right to participate is equally accessible to everyone. It is not enough to own the factors of production if you do not have access to the market. (Schmid 2000). In reality, the right to participate in the “free” market involves understanding both the processes that allow freedom of actions and decisions and the actual opportunities that people have, given their social and economic circumstances. (Sen 1999). The lack of freedom can arise because the right lies outside ones opportunity set either through inadequate formal institutional processes (such as the denial of political and/or civil rights) or through informal institutional mechanisms (norms and customs).

The coercive loss of freedom in the absence of employment choice has been a major deprivation for women and can have profound implications for the economic performance of a country. Constraining the opportunity sets of women in the labor sector has resulted in (1) a broadening in the opportunity sets of men in that sector; and (2) a broadening woman’s opportunity set in other sectors (i.e., those involving family and children). Because the preference for mother care has been grounds for excluding women from labor participation, before we can articulate hypotheses regarding the impact of alternative institutions, we need to assess, briefly, the etiology of this preference for mother care.

There are many ideological positions that grant women the status of being the most appropriate care providers. Many religious zealots, for example, believe that the traditional sexual division of labor is natural and ordained by God. The existence of the sexual division of labor and “women’s work” has a functional explanation as well. Bleier argues that the system of dividing work into specific tasks came very early on in human evolution because, while women with children could not hunt, they could pursue agriculture. This occupational status was functional as long as it was compatible with child-rearing and motherhood. Makepeace cites theories of human evolution as evidence of an environmental basis for the existence of mother care. The biosocial approach treats the psychological aspects of men and women as emergent given the evolved characteristics of the sexes, their developmental experiences, and their situated activity in society. Finally, Becker (1982) argues that the sexual division of labor is “efficient[xviii]” but the question becomes, efficient for whom? As I discussed above, the sexual division of labor in many instances functions to reduce bargaining power between women and men which then reinforces the status quo aspect of wealth distribution.

While human evolutionary explanations help us understand the institution of mother care, it cannot explain its persistence as increasing technological sophistication no longer posit that modern conditions require mother care or that good care by someone other than the mother is harmful to children. Technology, such as contraceptive devices, and alternative institutions that make day care possible changed the nature of the ultimate consequences of behavior that today negate a biological basis for the gender division of labor. There were a variety of legal and institutional incentives that were instrumental for changing the nature of women’s rights in the United States (Platt, 1973). The plasticity of the human learning potential (Lerner 1989) implies that humans can respond to the real conditions of family life for mothers, fathers and children.[xix] These stereotypes have undermined informal institutions, which tend to have great “survival tenacity” and are a consequence of, inter alia, how one was socialized in the culture, the power of habit, and the tendency of individuals to conform new experiences to a pre-existing reality (confirmatory bias). Moreover, men and women have a variety of understandings regarding the economic functions they serve (their “subjective perception of the payoffs” (North 1990; 79) which become self-fulfilling. (Myrdal 1944). For example, in Zimbabwe, women’s work brings in between 40 and 100 percent of family income yet women perceive their work as extensions of their domestic responsibilities.

Between men and women, woman’s participation in the economic sector is an incompatible use good because, if women are actively participating in the labor force then less jobs are available for men. This is the dual nature of rights. (Samuels). This situation is an interesting case because it involves “unused potential” (Schmid, AEC Period 29) as an incompatible use good. The question is, how can culture create new symbols so people can organize unused resources. (Schmid, ibid.). As an example, consider the adjustment program studied by Blackden and Morris-Hughes (1993), whose purpose was to implement market liberalization and price reform aimed at income redistribution. The conventional application of these economic instruments is predicated on the notion that shifts in incentives apply to all family/household members. The need to assume a gender-neutral framework is evident in the following case study of a Tanzanian village. A program that was designed to increase tea productivity was jeopardized after women refused to pick tea on their husbands’ plots so long as the proceeds were being distributed to their husbands. The calculations that established the viability of the project were based on the assumption of zero costs for labor, which reflected an underlying assumption that peasant households could be treated as a unity in which the household head could secure the labor of other family members at no cost. But, securing the labor of family members turned out to be a high exclusion cost good between men and women so collective action was needed to produce the good. High transaction costs prevented collective action from materializing, so the village leadership addressed the issue by initiating a policy of payment to individual members and not household heads. As a result, productivity increased as women became enthusiastic about tea production where they directly received payment for their work. This scenario exemplifies the important of money in the determination of resource control. (Schmid, AEC 810, Period 29). Moreover, it shows how adding technical resources (“knowledge, know-how”) is necessary but insufficient for productivity. Further, although money is a powerful incentive, we can imagine other non-monetary incentives that might effectively achieve similar results. The institutional question is how can we create new symbols so people can organize unused resources. (Schmid 2002).

Similar to the United States, women’s work in Tanzania is undervalued, which is reinforced by the legal and regulatory framework. Tanzania has a dual legal system which reflects colonial policy to develop modern statutory laws and regulations in the public sphere to govern economic relationships while avoiding those areas of the “private” sphere that are important to women. Other structures that mediate incentives by focusing attention to those factors differentially affecting a woman’s capacity to respond might equally result greater economic productivity. For example, processes that positively affect how “woman’s work” is valorized and registered in the market might result in higher productivity absent direct remuneration because non-monetary incentives promote a higher level of self-esteem. Frey (1997) explains that social values can be crowded out when they are turned into instruments leading to an unexpected decline in productivity[xx].

Hypothesis: Resource allocation in the household will differ depending on the type of household decision making rules that exist. In the situation of high exclusion cost goods, productivity depends on a cooperative system of bargaining, which in turn relies on the learned behaviors of trust and equitable sharing of resources within a household.

Interpersonal relationships such as love, friendship, attention to the elderly and community development are complementary to goods and services produced by markets and states. (van Staveren 2000). It is in these complementary characteristics that the role of social capital as a production factor in the care economy is expressed. (van Staveren 2000). The complementary characteristics of these goods contribute to the increasing returns of social capital and have the characteristics of cumulative causation. (Myrdal 1944). This is different from other types of capital that are not inherent in human relationships. Gender stereotypical patterns of socialization have resulted in the distribution of labor in which women specialize on paid and unpaid caring whereas men specialize in non-caring paid labor. Toronto (1993) suggests that caring has its basis within families. Caring is learned through experience. The best way to undo the socialization patterns is to create policies that provide positive reinforcement to men for engaging in this ethic of care. Markets and states are not able to produce them because of market failures and government failures, or they are produced at inadequate levels compared to the care economy. van Staveren (2000) has argued that human well-being cannot be generated through the market alone, nor through the care economy: economic actors need to produce in both of these domains in order to fulfill their needs. Researchers have pointed to lower transaction costs involved in the production of goods and services in the care economy, such as transport costs, marketing costs, costs of holding inventories among others. As a consequence, trust develops which leads to lower transaction costs in markets, unseats free riders and contributes to greater contributions of high exclusion cost goods. Caring also plays a prominent role for Hirschman (1970), who has shown the relation between market behavior, collective behavior and social, or caring behavior viz., “exit,” “voice” and “loyalty.”

Hypothesis: Countries that fail to produce the factors of production of a care economy, such as trust and loyalty, will not be able to achieve sufficient social capital between individuals, which will make economies of scale and provisioning high exclusion cost goods difficult to achieve and maintain.

By excluding explicit recognition of a woman’s work, and the resources it requires, the legal system has a built-in conceptual bias against women. And, since law determines prior rights, the failure to recognize the interdependence between the paid and unpaid economy results in biased articulations of macroeconomic policy as well. Consider the case of EEOC v. Sears, Roebuck, which illustrates how the marginalization of women into the private sector, along with heuristic biases that dictate separate spheres for women, has resulted in the devaluation of the care economy. In EEOC, the Equal Employment Opportunity Commission proved the in relatively high paying commission jobs women were illegally underrepresented. (Berry 1993). In defense of the subsequent discriminatory practice lawsuit, Sears proved successful by citing the work of psychologist, Carol Gilligan. In contrast to Lawrence Kohlberg, who found that women did not rise to the level of men’s moral development, consistently lagged behind them. Gilligan insisted that the process of moral development in boys is not superior, but merely different than that of girl’s moral development – whereas a boy emphasizes , girls emphasize an “ethic of care[xxi].” In insisting that women preferred lower paying jobs because they did not want the pressure that is involved in sales, Sears manipulated a cultural construction into a biological imperative. Women’s primary relationships at home and at work were presumed to make them sacrifice worldly advancement in favor of less demanding jobs and limited hours to accommodate their family lives. (Berry 1993). These types of decisions coercively force women to either adopt a traditional male model of employment, forcing women to outsource their care responsibilities to the market, or be excluded from the economy altogether. Either option represents a double bind for women, the former reduces the quality of care and locks women into low-wage employment that are characteristic of female occupations. The consequence is that the immediate payoff of having children decreased -- many women viewed having children as punitive rather than rewarding. The unwanted behaviors will cease to exist, but, because these measures are punitive, women will become resentful and find ways to circumvent the punishment. In terms of household dynamics, men will resent being manipulated, even with items they view as beneficial to their well-being (Sex?), which will lead to more punishment and more deviousness, etc.

We could, however, conceive of different legal rules that would have resulted in different income distributions and allocations. For example, as an alternative policy proposal in the EEOC case, the judge ruled that, since not all women express an “ethic of care,” each case should be decided in light of the “totality of the circumstances.” Alternatively, the judge could have emphasized the role of learning in human culture in contrast to his heuristic that “biology is destiny.” More importantly, however, the judge could have made Gilligan’s ethic of care rhetoric equally applicable to all members of society by expressing a view that relationships of care must exist among all individuals in the economy, something akin to what Elson has labeled the care economy. (Elson 1995).

Policies that are designed to alter the flow of costs and benefits will be more effective if followed with positive reinforcement. Therefore, if policy makers desire for women to be more effective mothers, then a policy that rewards good mothering as opposed to punishing bad mothering would more effectively achieve that goal. A policy that subsidizes women’s at-home work might be such a policy. In Britian, such a policy is being implemented. In France, however, both non-maternal and maternal child care is subsidized. Perrons (2002) has compared the two institutions, and concludes that, while the French system offers more choice, it also reinforces the class divisions between high and low income families.

The compatibility of childrearing and female employment is a necessary structural condition for women’s greater autonomy. Different institutional arrangements across cultures are illustrative. Swedish policies explicitly aim to help parents reconcile work and family responsibilities. Nyberg (2002) shows that the “third sector” of voluntary organizations played an important role in the emergence of their child care system. German policies encourage married women to specialize in child care. Consequently, the German system subsidizes housewives who stay at home. (Trzcinski 2002). Spanish policies, on the other hand, tend to ignore the problem but ignoring the problem does not mean that it is not present.

Hypothesis: Providing high quality children (a high exclusion cost good) depends on the orchestrated coaction between the informal and formal institutions that promote favorable work place conditions (part-time opportunities or schedule flexibility), make available affordable non-parental child care and value female children and the elderly.

IV. Institutional Change Analysis

In order for the law to most effectively guide individual behavior, formal institutions must undergo[xxii] change to reify the informal social structure and reflect the various ways people really live. This will require expansive rules concerning what constitutes a family that promote a sense of connection, caring and responsibility towards one another and reinforce proximal processes[xxiii] of development. Beall, J. and Kanji, N. (1999 citing Tripp (1994)) has argue that grass roots organizations and sustained resistance to everyday oppression can bring about cultural and institutional changes such that the old ways of exercising power cease to be feasible. As an example, they state that in Africa, the proliferation of associations have changed the political landscape and brought about important changes for the inclusion of women into the former political arena. Discussions at a meeting in Kampala, for example, led to articulations of democracy as a bottom-up issue beginning with the family. (Beall, J. and Kanji, N. (1999)). The economic crisis, structural adjustment and the resultant burden on women as key providers of the household have forced women to pursue new collective strategies and begin to create new arenas for political action. (Beall, J. and Kanji, N. 1999). “Complex adaptive systems are characterized by a global structure that emerges from local activity rules.” (Lewin 1999, cited in Schmid 2000). The emergence of greater equality in the marketplace and politics for women has its source in the frequent interaction among many different types of women because greater diversity of agents leads to richer emergent patterns. (Ibid.). Small changes at the local level can lead to large effects. As always, the problem lies in overcoming latency (Olsen 1965) as many women resist inclusion because of their multiple responsibilities. This will require overcoming the “survival tenacity” (North 1990) of a variety of informal institutions and rearranging the incentives to give women a reason to commit. To be cliché, institutions matter.

SSP Chart -- The Political Economy of Parenthood

Situation	Structure	Performance
IUG --Women’s labor in employment sector	(informal ideology) Sexual Division of Labor is Natural; Functional explanations; economic efficiency reifies women’s place in home, status (natural) Legal Rules: EEOC v. Sears, Roebuck; conceptual biases against women Care Economy Subsidize unpaid labor Subsidize maternal and non-maternal child care	Women precluded from economic sector Specialization – women specialize in childcare men specialize in paid labor Values traditionally associated with woman are valued in the economic sector, higher productivity, trust between individuals, loyalty Women’s work valued, children stay with mom Same as (4) but reinforces class divisions
HEC goods -- Woman’s labor in the household (Tanzanian Tea productivity)	Pay head of household Pay females for labor directly (Informal) create symbols to organize unused resources and create self-esteem	No tea produced; men free ride Tea produced, women satisfied, no free riders Women provided non-monetary incentives; collective action achieved; women feel good about their work, themselves
Specific Assets (Related to number of and access to mates. -Specific Assets Woman’s unpaid labor i.e., childcare and homemaking --with uncertainty	Exit Right (Divorce, Access to economic sector) No Exit Right Informal Institutions that value youth beauty Use of hostages and non-standard contracts Ecologically and legally imposed marriage rules (Cost Sharing Rules) 8a. (Hostage) Monogamy 8b. (Hierarchy) Polygamy	Loss of specific assets, family cannot recuperate; women work, not at home for children. Women educated and employed. Women confined to unpaid sector, depression, resentment. Women often stuck in abusive relationships (lock-in) Women dumped for something better, break-up of family; low parental investment, economic insecurity Opportunism. Assets lost, monitoring is an invasion or privacy and EOS not realized ala Becker a. High Parental investment. Reduction in full income including non-market commodities; minimize cost of competition between men; increases cost of competition between men and between women. 8. b. Females have more say; multiple partners to share child rearing tasks; family rivalries and jealousy. Economies of scale achieved; Male Dominated Societies – violence breeds males breeds more violence
MC=0 --Children (good)	(Informal) Preference for Males; e.g. China Confucius (who chooses, males preempt females) Administration: (Formal) one-child policy e.g. China Types of family arrangements influence amount of parental investment, either two parent, one parent, partible paternity Cultural practices that value elders (females) Rules that foster emotional bonds between parents and children	Skewed birth ratios, more men, less females, violence, sexual “deviance” Same, reifies informal rule Rates of survival improve, children healthier;proximal processes of development stronger or weaker Child mortality rates decrease More parental investment with more love, lower mortality rates
High Information Cost --mate searching (good) Uncertainty Bounded Rationality C-D gap	1. Standard operating procedures (e.g., dressed well means wealthy); Defenses that prevent exploitation	Short term access to sexual favors High rates of divorce because C-D gap leads to mistakes made

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