Stumbling and Mumbling

My abortion doubts

My fellow Liberal Conspirators want me to join the Coalition for Choice. I’m reluctant to do so, as I ’m not at all happy about defending the right to abortion. 
I say this because there are two secular arguments for thinking foetuses have value.
One is simple empiricism. Many women who miscarry feel something like bereavement, which suggests they regard a foetus as something like a living being - not as much so as an actual child, perhaps, but certainly more than just a bundle of cells.
The other is that a foetus can be regarded as a call option upon a human being. If human beings are valuable, an option on them must also have value - though again, less than that of a full human.
You don’t, therefore, need to believe in religious mumbo-jumbo to believe that an abortion destroys something of value. 
That said, there are arguments for allowing abortion. Not least is that abortions are often not so much a net destruction of life so much as a re-arrangement of it. There are people alive today who owe their existence to abortions.
This is because a major motive for a woman to have an abortion is that she is not yet ready to be a parent.  Having an abortion at 20, then, can be a way of clearing the ground so that she can be a good mother at 30. If this woman were banned from having an abortion at 20, the child she has at 30 might not be born at all - as she would feel unable to give it as much attention as she'd like.
Allowing abortion, therefore, helps ensure that children are brought up by better parents - with more chance of becoming good citizens. And banning abortion would merely further increase the number of ill-brought up yobs roaming the street.
My problem is, this argument - whilst appealing - is a close neighbour of some very ugly ones. It’s a form of liberal eugenics.
Now, I don’t want to reach a strong conclusion here. Instinctively, I'd much rather side with abortion rights' campaigners than with religious maniacs and evidence-manipulators. It's just that I can't trust my instincts.

Against child support

Hopi Sen opens a can of worms: what should the left do about family breakdown?
In one sense, there’s not much policy can do. As Hopi says, dysfunctional families are centuries old. And they are not confined to the underclass; countless well-off people identify with Bree’s remark: “We might as well sit on the porch and play banjos.”
There is, though, one thing that could be done - stop giving people an incentive to have children.  The tax-payer spends over £15bn a year in child benefit and tax credits - and that‘s before the billions we spend failing to educate kids and on the police and prison service for picking up the mess.
One result of this is that a single person on a full-time minimum wage gets an income of  £72 a week more if she has a child than if she doesn’t - and, indeed, would be £6 a week better off even if she gave up work to have a kid.
There are three arguments against such subsidies:
1. At the margin, they give people an incentive to have children. And the marginal parent is likely to be a bad parent. One lesson of the Shannon Matthews affair is that even people who are long odds to win the economics Nobel respond to incentives. 
2. There’s no good leftist principle that requires the tax-payer to write blank cheques to people who get into messes of their own choosing. We should be helping those who can’t help themselves - the low-skilled, the unlucky, but not parents.
3. Having children is not a right, but rather a burden one imposes upon others - it‘s not as if the country is under-stocked with people. And if one is going to impose such a burden, one should pay the price, not get a subsidy. On this point, John Stuart Mill was - as usual - more clear-headed than most liberals:

To bring a child into existence without a fair prospect of being able, not only to provide food for its body, but instruction and training for its mind, is a moral crime, both against the unfortunate offspring and against society; and that if the parent does not fulfil this obligation, the State ought to see it fulfilled, at the charge, as far as possible, of the parent…
The fact itself, of causing the existence of a human being, is one of the most responsible actions in the range of human life. To undertake this responsibility--to bestow a life which may be either a curse or a blessing--unless the being on whom it is to be bestowed will have at least the ordinary chances of a desirable existence, is a crime against that being. And in a country either over-peopled or threatened with being so, to produce children, beyond a very small number, with the effect of reducing the reward of labour by their competition, is a serious offence against all who live by the remuneration of their labour. The laws which, in many countries on the Continent, forbid marriage unless the parties can show that they have the means of supporting a family, do not exceed the legitimate powers of the State.

You might object that this is hard-hearted. Perhaps it would be excessively so if child subsidies were to be withdrawn immediately, as opposed to new claims being stopped. 
Or one might wonder where it leaves the government’s target of abolishing child poverty. Well, I’ve never been clear what’s wrong with child poverty as distinct from bad parenting - indeed, there’s something to be said for it. I suspect the left’s concern with child poverty owes more to soft-headedness - “think of the ickle-wickle kiddie-widdies” - or to a desire to bribe median voters than to serious moral thinking.
And wouldn’t the billions saved on throwing money at the likes of Karen Matthews be better spent on improving fostering and adoption services, better schools in poor areas or upon early years education such as Sure Start?

Drink, pregnancy and earnings

Last week, Nice advised women to avoid alcohol whilst they were pregnant. New economic research supports this, as it suggests that drinking during pregancy has long-term effects upon the child's educational attainments and earnings.
To establish this, J. Peter Nilsson looked (pdf) at the effect of a liberalization of Sweden's  tough alcohol laws back in the 60s. In November 1967, two Swedish counties,  Varmland and Gothenburg & Bohus, allowed ordinary grocery stores to sell strong beer. As a result, beer consumption in these counties leapt 10-fold, until the ban was re-imposed in July 1968.
And Mr Nilsson found that children in these two counties who were conceived just before the liberalization - and hence were likely to be exposed to more alcohol in the womb - did far worse in life than children in counties where alcohol was liberalized, or who were conceived in the two counties after the ban was re-imposed.
He found that men exposed to the extra drinking, on average, completed half a year less schooling than those who weren't exposed. And, at age 30, both men and women who were exposed earned one-fifth lower wages than those who weren't exposed - a massive effect.
If this sounds like the puritans are right, cheer up - exposure to alcohol after you've been born seems to raise wages.

Should Heather get the money?

Danny asks why Heather should get so much money from divorcing Paul.  I reckon it's because a general law which gives women alimony has three benefits. These occur even if the woman doesn't sacrifice earnings during the marriage,  if there are no children, and if the woman has done nothing to improve the man's wealth. They are:
1. It improves women's bargaining power within the marriage, by increasing women's outside options and by giving the threat of divorce more sting to the man. Insofar as men are the most powerful partners in a marriage, this is equitable and - assuming diminishing marginal utility to the things partners bargain over - potentially efficient*. Simon Clark makes this point here.
2. It gives high-earning women more incentive to marry, and so improves the pool of women available to men who want to marry. What other reason would Carla have to marry Tony?
3. It improves the quality of marriages, because if a man knows a divorce will be costly, he'll be less inclined to fall into marriage with the first woman to come along.
The problem is, though, that there's a trade-off between points 2 and 3; whilst alimony incentivizes women to marry, it disincentivizes men. Traditional thinking holds that this is a bad idea, as women want to marry more than men do, perhaps because their assets (looks) depreciate more than men's (money), and so they have more desire to lock in the value of their assets. However, Paul's initial willingness to marry Heather in the first place suggests this isn't universally true.
* For example, if the first hour a week of housework is less irksome to men than the 20th hour is to a woman, anything that increases women's ability to transfer one hour of work to the man yields a bigger welfare gain to her than loss to him.

Taxes & marriage

Every good Conservative is in favour of stable marriages and low taxation. But what if the two goals conflict? That's the issue raised in this new paper, which shows that redistributive taxation can help promote marriage. The authors say:

Marriage involves some intra-family redistribution, particularly if the people who marry are very unequal in their income-earning abilities or wealth. This may prevent people with different income from marrying even if their emotional benefits from marrying were large, because the high income earner is concerned too much about sharing his or her income with the respective partner...Taxation reduces the inequality and this makes the emotional rent from marrying more important for the private decisions about whether to marry, and this improves the efficiency properties of marriage decisions.

There's not much romance in economics is there?
However, the benefits of redistributive tax in promoting marriage will depend, in part, upon how partners meet. In a society which is already segregated by income,  the Mills & Boon ideal of the rich man meeting the poor girl just won't happen. In this case, redistributive taxation will have no effect.
However, in a society in which people of different incomes do meet - say because they share similar interests - such taxation will promote marriage.
This raises a question. If we really want to promote marriage (and it is an if), should we really be content  with the silly idea of tax breaks for married couples, or should we also think about the social institutions through which people meet in the first place.

Cheryl & Cashley: the economics

Should Cheryl divorce Cashley? The economics of the decision are more balanced than you might think.
The case for her doing so, other than that he's a lying cheating no-good shortarsed drunk with a dick the size of a bookie's biro,  is two-fold:
1. She has good outside options. Research shows (pdf) that the probability  of divorce rises, the higher is the woman's  share of family income. What's more - and in this she differs from Ms Beckham - she has a good probability of getting herself a better bloke than Cashley. (Not me though - her bandmate Sarah has first refusal.)
2. Maslow's hierarchy of needs (and indeed diminishing returns) predicts that, as income rises, other personal goals become more important relative to income. Among these is self-esteem, and this points in only one direction.
Against this, two points argue for her sticking with Cashley:
1. Income hedging. Although Girls Aloud are one of the greatest pop bands in British history, public tastes are fickle, so Cheryl faces income risk. As hers and Cashley's incomes are probably uncorrelated, Cashley is a good hedge.      
2. Joint incomes matter. The same research that showed that divorce rises with the wife's relative income also shows that divorce is less likely, the richer is the couple. This could be because spouses get utility from each other's income, independently of their own. Or it could be because a high joint income complicates the finances of the divorce decision. This effect, however, is weaker than the outside options effect.
The decision, then, is fimely balanced. But the 10-1 you could have got on them splitting at the start of the year now looks a good price.

Cohabiting as call option

National Statistics reports that the number of people cohabiting has risen sharply in recent years, whilst the numbers marrying have fallen. Why? Options pricing can shed light.
Think of cohabiting as a call option on a desirable marriage, where this means being hitched to the best available partner. An increase in the number of people cohabiting is a sign that the value of the call option has increased.
Why? Basic options pricing says that a call option becomes more valuable with time - the longer it has to expiry, the more chance there is of it becoming in the money (ie worth exercising) - and with volatility; the more volatile a share is, the more chance it has of becoming in the money, and so the more valuable is the option.
Both these forces might have increased the value of the call option of cohabiting.
Take time. Think of this not as a fixed period - a day, year - but rather as the quantity of stuff that happens. In particular, think of it as the number of people you meet; the more you meet, the more time there is. So if you meet 10 people a year, you have more time than if you meet five.
The more people you meet, the more valuable is the call option of cohabiting. This is because such encounters will either confirm your belief that your cohabitee is "the one", or give you more chance of meeting the person who is. Either way, the chance of your option being in the money - that is, your prospects of getting hitched to Ms Right - has increased.
I suspect that the number of people we meet is greater now than years ago - partly because workplaces have become less gender-segregated. If so, the call option of cohabiting has risen, ceteris paribus.
Now take volatility. The analogue to share price is uncertainty about other people's character; the more uncertain we are about other people, the more valuable is the call option of cohabiting. This is partly because there's more chance we'll learn that our cohabitee is not "the one", and partly because there's more chance of us finding that someone else is.
So, here's a theory. Other people's characters have become less predictable, or more changeable, down the years. "You've changed - you're not the person I married" is a cliche today. But you can never imagine Celia Johnson saying it in Brief Encounter.
Maybe increased anomie, the decline of social capital or greater geographical mobility makes it harder to learn about people's character because we know less about their family, where they're coming from. Or perhaps - if you believe the managerialist rhetoric - a faster pace of change means that people really do change.
Whatever, the resulting uncertainty increases the value of the call option of cohabiting, relative to the value of exercising it by marrying.
I know there are other explanations for the rise of cohabiting, but I don't know if they are as interesting.

Less divorce: a good thing?

Today's figures show that the divorce rate has fallen to a 22-year low.
Is this good news? Superficially, it seems so. Divorce makes people unhappy, even if they were in a miserable marriage beforehand. And children from intact families grow up to be happier (pdf) and better educated than those from broken homes - a tendency that might not be much ameliorated by policy intervention.
So, less D.I.V.O.R.C.E is to be welcomed?
Not necessarily.
One reason why divorce rates are falling might be that marriage rates are falling.
Obviously, fewer marriages mean fewer divorces. But they might also mean a lower divorce rate. This is because when everyone gets married, there'll be lots of bad marriages. But if there are fewer marriages, only those who are reasonably sure that they've found "the one" will get married. So, fewer marriages mean better marriages. A lower divorce rate is therefore a product of a selection bias.
In this way, far from being something to be welcomed, a lower divorce rate might instead be a sign of declining social capital.

Economics & marriage: a bad fit

I fear Bryan Caplan is pushing conventional economics a bit too far here. He criticizes Megan McArdle's claim that "in an ideal world, of course, women and men would take equal responsibility for the household." It completely ignores comparative advantage, he says:

What if a man has a much higher wage than his wife, but can't clean, cook, or shop to save his life? Should he still do half the cleaning, cooking, and shopping? Wouldn't husband and wife alike be better off if he specialized in bringing home the bread, and she specialized in baking it?

And, he adds, it

...totally ignores market forces. What if there are two men for every woman? Men are naturally going to offer a better deal to potential spouses than they would if the gender balance were reversed. What's so bad about that?

Now, I'm even less expert here than I am on most things, but I fear Bryan's overlooking three things:
1. Symbolism. Food and cleaning are not just source of nutrition and tidiness. They have symbolic meaning. Cooking and cleaning for others, outside the market, are signals of hospitality, love even. If one person specializes entirely in cooking and cleaning, such symbolic offerings go in only one direction. Something gets lost.
2. Social norms. The norm has  evolved that marriage is, or should be, a partnership of equals. Now, this norm might be irrational for reasons Bryan mentions. But given that it exists, violations of it - expecting parties with a stronger bargaining position to get more out of a marriage - are frowned upon. 
This might be rational. Take a parallel with the ultimatum game. In this, people often reject offers that would make them financially better off, if such offers violate norms of fairness. But is irrational only in the narrowest sense. It's quite rational, once we realize that people value norms, as well as material gains.
3. Signalling. In ordinary economic life, a fantastic offer is a fantastic offer - end of. But in dating, it's not. Women reject men who are rich and good-looking, fearing there might be something wrong with them; their high eligibility sends an adverse signal, sometimes correctly so. This means bargaining power is more equal than Bryan thinks.
There's a common theme here. Bryan is treating marriage as if it's an agreement between homos economicus - people who are instrumentally rational with full knowledge and no moral values. Whilst this view can be tremendously (pdf) insightful, it has its limits.

Labour splits up families

New Labour's tax credits have increased the divorce rate. That's the message of this study of the effects of the introduction of Working Families Tax Credits:

Women married to a partner who does not work or works fewer than 16 hours per week were more than two percentage points more likely to dissolve their partnership after the reform than their childless counterparts. This is a substantial impact upon the divorce rate, representing an increase of almost 160 percent respect to the pre-reform period.

This is because New Labour increased the support for single parents. The effect was especially big for more educated women or those with younger children. There was no significant effect for couples were the man worked more than 16 hours.
There are two possible reactions to this.
One is that this is disastrous. Divorce causes a big decrease in well-being and even health (pdf), which these women might fail to anticipate. And the lack of a male role model in the house can mean that children from single parents grow up worse (pdf) than those from two-parent families.
On the other view, tax credits have given women the freedom to escape bad marriages. And the sort of man who works less than 16 hours a week is probably a bad role model whom the child is better off without.
Take your pick.