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Tag Archives: production possibilities

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By Lilli DeBode, guest blogger, senior at Kent Place School

A recent study shows that the glass ceiling not only pertains to employment, but also to marriage.  The results demonstrate that as women earn more than their husbands, the frequency of those marriages decreases. In other words, there are tons of couples in which the man makes a greater or equal amount of money than the woman, but there are many fewer couples as income reverses. (It should also be pointed out that all of these couples were in the age range of 22-34 years old, so the presence of children could not really skew the numbers). The study also makes the equally upsetting point that as women start to out-earn their husbands, the rate of divorce increases. Interestingly enough, it did not make a difference how much the disparity between the two paychecks was. Just in general, if women earned more, the occurrence of divorce increased.

The results also show that a woman who has the potential to out-earn her husband often either decides to work less or quit her job altogether. Why is this? It could be because she realizes how detrimental (and possibly terminal) it could be for her relationship. Another explanation proposed by the study was that in marriages in which the woman makes the smaller paycheck, the woman is the one who does the majority of the household chores. Therefore, it only makes sense that if the woman is the one who earns more money, then the man should be the one to take care of the chores. Oddly, this is not the case. Just because of social norms, women, even if they work longer hours and earn more money, are still expected to complete the household tasks.

So what does this mean for the economy? A significant proportion of women are not working at full potential, thus under-utilizing our nation’s production possibilities. Especially at a time in which our economy desperately needs a productivity surge, gender norms and stereotypes should not be hindering our economy to this extent.

Sources and Resources: To read more about this issue, New York Magazine has a very interesting article about the troubles which can stem from having a relationship in which the woman is the “alpha.” The Economist also has an article which discusses the issues above in more depth.

Note: The title was slightly edited after this entry was posted.

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The Surprising Glass Ceiling in Sweden and France

It is tough for a Saudi Arabian woman to get a driver’s license. Only in rural areas might you see women behind the wheel. Even with recent protests, imagine, to get to work, to pick up groceries, to take a child to the doctor, you need a man. And, if that man is not a relative, you have to pay him.

A 2009 Time article tells about a female deputy minister of education who uses video conferencing to communicate with male colleagues. Among the lowest in the world, the labor force participation rate for Saudi women is 17%. And yet, literacy among Saudi women is high.

The Economic Lesson

For us, the key here is human capital. For an economy to grow and thrive optimally, the factors of production, land, labor, and capital, need to be appropriately allocated. When there is gender bias, women’s talents are underutilized. Consequently, economic growth is less than it might be.

An Economic Question: To illustrate underutilization, economists can use production possibilities graphs. On production possibilities graphs, with the X-axis labeled consumer goods and the Y-axis, capital goods, a bowed out curve is drawn which illustrates a country’s maximum production capability. How would you display current production in a nation that constrains female performance?

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Sometimes the federal government spends a tax payer’s money in unexpected ways. According to the Washington Post, scientists funded by the Department of Defense are studying snakes that can fly. Slightly venomous, sort of air-slithering, these Southeast Asian snakes can glide through the air for as far as 780 feet. Our DOD wants to know how.

Thinking about the DOD and flying snakes took me to the space program. For industry and consumers, there are lots of practical examples of NASA sponsored research that have been used productively in the private sector. My favorite, though, is the golf ball with “500 dimples arranged in a pattern of 60 spherical triangles.” You can guess the benefit. Ball flight is faster and more stable.

As NY Times columnist David Leonhardt emphasized, fiscal prudence involves retaining projects that will stimulate economic growth. And as Thomas Friedman said, this takes us to “More (Steve) Jobs, Jobs, Jobs, Jobs.” To grow and diminish unemployment, we need to stimulate innovation.

The Economic Lesson

New technology and ideas propel economic growth. Economists can use production possibilities graphs to illustrate economic growth. On production possibilities graphs, a bowed out curve is drawn which illustrates a country’s maximum production capability. For example, when the ability to schedule thousands of overlapping activities is developed by NASA, licensed to a private company for commercial use, and manufacturing becomes more efficient, the production possibilities curve shifts to the right. 

Maybe flying snakes research will eventually shift a production possibilities curve?

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Last night the Oprah special on the Leadership Institute for Girls was on TV. I only saw the last 20 minutes, but I was amazed at the project she put together. These girls were so excited to go to school. It got me thinking about the gap between kids in America and kids in other countries.

Another point stuck in my mind. Oprah told these girls that if they did well, she would pay for them to go to a top university for four years. The first thing I thought: This is a huge amount of money. When a person has that much money to spend, how should they spend it? Should money be invested in these people to ultimately better their lives and allow them to change a country for the better? I think Oprah has singlehandedly started a change in South Africa.

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