Summary of chapters 3,4 & 5 of the book ‘The Economics of Women, Men, and Work’ by Blau, Ferber & Winkler

Chapter 3 of the book is titled The Family as an Economic Unit.  Here the authors discuss the importance of the concept of family for the functioning of neoclassical economic models.  In the United States and other Western capitalist democracies, the neoclassical economics is the dominant paradigm for analysis and policy.  In this context, it is interesting to study the institution of family from an economic viewpoint.  While neoclassical economics sees the individual citizen as the basic unit among consumers, the family is the next immediate consumer unit.  But herein lies a contradiction.  For example, for the prevailing economic model to work one has to believe that individuals act as self-serving consumers.  But families are founded on the notion of group-interest as opposed to self-interest, whereby one member of the family should forgo some of his/her wants for the sake of family’s wellbeing.  Data gathered over the last century has shown that the family has remained a resilient economic unit despite constant challenges to its existence.

Similarly, the advantages associated with division of labor, which is a key aspect of neo-classical theory, does not hold up in certain circumstances.  Of late, traditional beliefs about division of responsibilities between senior members of the family is also challenged.  As societies have become more technological and the process of globalization accelerates, the meaning and scope of ‘division of labor’ within a family also undergoes a change.  For example, the greater participation of women in the labor market, and the increasing rates of divorce in advanced societies undermine theories pertaining to the family as an economic unit.  Women are also more aware of the risks associated with being economically dependent on their husbands.  As societies become more liberal and free, many of the conventional institutional structures and economic theories based on them would be dismantled.  Despite these changes, women continue to shoulder a major share of household responsibilities.  In the future, factors such as the availability and affordability of day care and elder care facilities would determine the nature and functioning of family as an economic unit.

Chapter 4 titled Time Allocation Between the Household and the Labor Market offers an in-depth analysis of the relation between these two key aspects of an individual’s life.  Statistical analysis of trends in the labor market over the last century shows that while female participation has increased multi-fold (from 20 percent in 1900 to 60 percent at the end of the century), male participation has marginally declined during the same period.  And this change in gender roles within the labor market has directly affected the functioning of the household, and the structure of family.  The authors then go on to predict how these trends will take shape in the future.  Firstly, there is no basis to claims by certain economists that there is a reversing of the trend with respect to female participation in the labor market.  Even during the peak years, a certain percentage of employable women have given up their market work for catering to home needs, especially those with young children.  But there is no indication that more women would adopt this practice in the future.  Secondly, the female work force is unlikely to keep up the growth rate seen in the last 50 years.  According to the Bureau of Labor Statistics, the female work force has increased by only 2 percent since 2000, which is very small when compared to the robust growth in previous decades.  This saturation/plateauing level is likely to be maintained in the foreseeable future.  Even in the men’s participation rate there was stability over the last 10 years, with the figure hovering around 75 percent.  Another key factor is the ageing populations of the country, where the labor market would be affected by the mass retirement of baby-boomers (of both genders), who had been the economy’s backbone in the period after Second World War.  Finally, the authors predict that the differential in labor force participation is to reduce further between men and women.  The gap between the male and female participation rates, which has reduced from 15 percent in 2000 to 11 percent (approx.) in the last decade is likely to reduce further.

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