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
Being a locavore can be confusing. Eating broccoli from the local farm stand tastes good and makes many of us feel good. It is a pleasure to support local farmers and get vegetables the day they were picked.
On the other hand, inefficiency is one huge problem.
Specializing makes economic sense. Almonds, strawberries and grapes should come from Californians because their weather and soil conditions optimize output. Warm days, cool nights and fertile volcanic soil make Idaho one of the best places to grow russet potatoes. Concerned about carbon emissions? It is likely that the inefficiencies of local production more than offset the carbon emissions from long distance transportation.
And yet, proposed legislation from an Ohio Senator and a Minnesota Congresswoman, The Local Food, Farms and Jobs Act, supports small farm production. Or as one of the bill’s sponsors said, “Making it easier for farmers to sell food locally and easier for consumers to buy it translates directly into a more healthy economy and more jobs in our communities.” By contrast, one researcher estimates that it means much less food production per acre and additional use of fertilizers and chemicals.
Do you support The Local Food, Farms and Jobs Act?
The Economic Lesson
Specifically linking Albany and Buffalo, the Erie Canal facilitated a national market in the U.S. As an inexpensive way to transport Midwestern farm produce, it let the Northeast focus on manufacturing.
As the efficiencies of specialization fueled economic growth, economist David Ricardo (1772-1823) would have been delighted.
An Economic Question: How did impact of the Erie Canal illustrate David Ricardo’s principle of comparative advantage?
- If you were asked to select the world’s fastest growing economies, maybe you would place China at the top of your list. This Economist Daily Chart sums it all up. 6 of the world’s fastest growing economies, 2001-2010, are located in sub-Saharan Africa. And Angola is #1.
- Here, showing the growth of small-scale manufacturing in Africa, the WSJ focuses on a chocolate maker in Madagascar. Among the best in the world, the cocoa is premium. However, the transportation and communication infrastructures sound tough. Just getting a cell signal near one chocolate factory required walking to the top of a hill, 3 miles away. It echoes what Professor Timothy Taylor says in his Teaching Company lectures on Africa (#19 and #20) for “America and the New Global Economy.” (The course is excellent.).
- And finally, back to the Big Mac Index. The only African country listed is South Africa where a $4.07 U.S. Big Mac costs $2.87.
The Economic Lesson
African economic development returns me to a wonderful econtalk lecture on Adam Smith and David Ricardo. It takes us to the economies of scale that a larger market can facilitate. Then, as Smith and Ricardo told us, with specialization and trade everyone becomes more productive.
How then to facilitate the growth of small African factories through world trade?
The Economic Question: Looking at the Economist Chart on the world’s economic growth, you might check the GDP of Angola to see how its size compares to #2, China, with a GDP of $10.1 trillion (2010 US dollars).
What happens when you build an airport and nobody uses it? China has an answer. Although China faces underutilization as it develops its transportation infrastructure in the air, by rail and roads, it seems to be continuing.
China’s policy took me to a recent Econtalk podcast from Russ Roberts. Focusing on trade, Adam Smith, and David Ricardo, he began by saying that, ”self-sufficiency is the road to poverty”. By contrast, affluence grows when people specialize and trade. However, people can sustain specialization only when they have demand. And when demand grows, specialization will spawn technology, knowledge, and wealth. A transportation network is a fundamental requisite for specialization and the innovation that Roberts says market size stimulates.
The Economic Lesson
As the rationale behind trade, David Ricardo’s principle of comparative advantage says that overall productivity will increase when people specialize in whatever has the least opportunity cost. Saying specialization has so many benefits that even when two nations have identical opportunity costs they should trade, Roberts takes Ricardo a step further.