When North Carolina’s voters rejected same sex marriage, they were not thinking economically.
Traditionally, marriage has been about specialization. With the husband in the labor force and the wife at home, their division of labor resembled a small factory. He supplied the income and she was the “domestic specialist.” As in the factory, specialization led to a more productive household.
Marriage has become a different kind of economic unit. In many households, both partners earn income and both (or none) cook. Washing machines, dishwashers and microwave ovens minimize chores. We have day care and take-out.
With the division of labor changing, so too has the institution. Previously marriage was based on shared production. Now, increasingly, marriage is all about shared consumption. Marriage has become what economists Betsey Stevenson and Justin Wolpers call “hedonic.”
As a result, the demand and supply sides of contemporary marriage markets in which people find partners reflect new values. Correspondingly, the contemporary household as a production unit increasingly is designed for companionship and “consumption complementarity.”
And this returns us to North Carolina and same sex marriage. The new economics of marriage has changed the characteristics of the people who enter marriage markets and of the households they form. Inexorably, new incentives are leading to new choices. As more households change, will politics follow?
University of Pennsylvania economists Betsey Stevenson and Justin Wolpers (who live together and have a child but are not married) explain a lot more about the new economics of marriage here and here and here. If you want to continue further, Ezra Klein’s Washington Post Wonkbook also discusses Stevenson and Wolpers and how their view of marriage relates to the North Carolina vote.
Posted by: adminEcon
Tags: Betsey Stevenson, division of labor, domestic work, economics of marriage, gay marriage, household production units, Justin Wolpers, labor markets, marriage markets, North Carolina, opportunity cost, specialization, traditional marriage
The CEO designate of IBM will make it 29. There will be 29 women who are CEOs of Fortune 500 companies. 27 of those women are married, one is divorced and one never married.
Financial journalist James Stewart explains in the NY Times that the traditional balance of power in a family shifts when a woman runs a major corporation. Rather than the wife helping her husband, the husband “does the laundry.” In his article, Stewart asks whether we can respect the CEO’s househusband as much as we respect a CEO’s wife.
Our bottom line? As an economic unit, the family is changing.
The Economic Lesson
Led by Nobel Prize laureate Gary Becker (1930- ), behavioral economists think of the family as a little factory in which a division of labor creates “products” including children and communal activities. Becker says in The Essence of Becker, “Members who are relatively more efficient at market activities would use less of their time at consumption activities than would other members.” (p. 108)
An Economic Question: Knowing that labor has a price, would you agree with Eduardo Porter when he says in The Price of Everything that the “price” of women changed with their increased labor force participation?
What we ship things in makes a difference.
Take the banana, for example. In 1876, at the Philadelphia Centennial Exposition, the banana was a delicacy (and very black). Millions of bunches could only be sent to U.S. shores if they were refrigerated. By 1901, as I describe in Econ 101 1/2, United Fruit was distributing 14 million bunches of bananas in the U.S. One reason, in addition to the railroad and the steamboat, was a banana vessel that could maintain a 53 degree temperature for its cargo.
Just like refrigerated banana vessels transformed world trade, so too has the cargo container. Introduced in 1956, now one ship can carry 3,000 forty foot containers with 100,000 tons of shoes, electronics and clothing. Imagine the potential efficiency. Put everything in the container, arrive at a port, and just slip it onto a truck or a railroad car for it to move to its next stop. Journalist Marc Levinson says the result is more variety for consumers, lower freight bills, less shipping time, lower inventory costs and longer supply chains.
This takes us back to yesterday’s supership post and the expansion of the Panama Canal. Larger ships mean more containers on board. The NY Times said that the newest generation of superships could hold 15,000 containers that are 20 feet long.
The Economic Lesson
Adam Smith would have been delighted to see his ideas about mass production and regional specialization extend around the world. Describing the productivity of factory pin production in The Wealth of Nations, he told us that one worker, functioning alone, could produce 1 pin per day. However, when that worker specialized through a division of labor in a factory, 4,800 pins per worker per day were made.
Adam Smith used the term “distant sale” to explain the transport of goods from a factory to a distant market. He could have been describing a container ship moving from China to the U.S.