Stumbling and Mumbling

Housework and wages

Here's one reason why women earn less than men - they do more housework. Mark Bryan estimates that, for married women, each hour of housework per week reduces wages by 0.16%.
As the average married woman does 12 and a half hours of housework (five more than single women), this implies a wage reduction of 2%.
This is controlling for the possibility that women with high earnings capacity tend to be more career-oriented and less inclined to do housework than other women.
The effect seems to exist independently of whether women have children or not, so it operates on top of the "child penalty (pdf)" in women's earnings.
Dr Bryan says:

Tiring activities like housework reduce the amount of effort available for market work, resulting in lower prductivity and wages.

Economic growth & family breakdown

Danny Finkelstein says economic freedom and prosperity have led to family breakdown. I agree. There are numerous mechanisms here.
Start with the dishwasher. This embodies an important feature of economic growth - it's given us labour-saving household technologies. Thanks to dishwashers, microwaves and the like, people no longer need to spend hours on household chores.
This has had several effects, described by Jeremy Greenwood. It means it's more technically feasible for men and women to live alone. That alone has reduced the marriage rate and increased the divorce rate. It also means wives have had the time to enter the workforce. That's led to more affairs - as men and women meet more often away from their spouses eyes at the workplace. And in giving women an income outside marriage, it's increased their ability to divorce their hubbies.
This, though, is not the only way in which divorce has risen, and marriage fallen, because women no longer need a meal ticket. One feature of economic growth is a decline in relative demand for physical strength and increased demand for intellectual or social skills. This too has led to increased numbers of women workers - and the more skilled among them are not marrying and having children.
A third mechanism is creative destruction. Economic growth is - in the long-run - often fastest where job destruction rates are high, as this frees up resources for more productive uses. But job loss leads to more divorce (pdf), not least because it signals to people that their spouse is no longer the meal ticket they thought.
Also, economic growth is associated (the causality goes both ways) with social and geographical mobility. This means people are less likely to meet like-minded others. That means less chance of marriage, and possibly more chance of bad marriages that don't last.
Finally, economic growth raises people's aspirations - it encourages the belief that you can have more, "because you're worth it." This in turn creates dissatisfaction, with the result that a wife with a mediocre spouse is less likely to stand by her man*.
So, I reckon Danny's right. Family breakdown - not just more divorce but fewer marriages in the first place - is a necessary part of the consumer revolution, not just something separate.
This could be a big part of the solution to the Easterlin paradox - the finding that economic growth doesn't make us much happier. Good marriages are fantastic (pdf) for our health and happiness. So if prosperity ecoonmic growth causes there to be fewer of them, it won't make us happier.
* reference to proper music inserted as an antidote to Danny's talk of some over-rated scousers.

Teenage parents

Britain, notoriously, has a higher rate of teenage pregnancies than the rest of Europe. But so what? This new paper by Marco Francesconi estimates the damage done by being born to a young mum.
He compares the children of teenage mums to their younger siblings, born when their mum was over 20. This controls for the possibility that teenage mums have "bad genes" (impatience, lack of self-control) that might jeopardize their children's chances of success in life.
He estimates that, even controlling for this, the children of teenage mums are 12.7 percentage points less likely to get an A level, 5.2 percentage points more likely to be economically inactive, and 2.7 percentage points less likely to be in the richest 10% of earners.
But what's the mechanism? There are (at least) two possibilities. One is that teenage mums are likely to be poorer. The other is that they are more likely to have unstable homes. Either, in theory, is bad for their kids. Here, Marco's findings will delight conservatives:

An important channel through which the adverse effects of having a teen mother are transmitted to children's later outcomes is childhood family structure...Growing up in a non-intact family not only has detrimental consequences on its own, but also magnifies the negative effect of having a teen mother on several young adults' behaviours...the interaction between childhood family poverty and teenage childbearing does not seem to have a strong additional influence on child outcomes.

However, it's not just being a teen mum that's bad for kids. Marco shows that kids born to under-24s get less educated, and are more likely to be economically inactive, than those born to over-31s.

Don't blame the parents

Children don't get their values from their parents. That's the message of this new paper.
The authors got parents and chidren to play a public goods game, in which subjects could choose between giving money to a group and getting a high return to the group or keeping money for themselves and free-riding.
And they found that there was no correlation at all between parents' contributions and their childrens'. The children of pro-social parents were no more likely to be pro-social than the children of free-riding parents.
This doesn't mean the family has no influence upon attitudes. The authors found that children from large families were less likely to contribute to the public good, perhaps because competition for attention and resources within the family made them more selfish.
What it does suggest, though, is that even youngish children don't learn values such as altruism and selfishness from their parents. It also suggests that self-assessment isn't reliable.
Environment, then, seems to matter more than family.

Genes matter

What matters more: nature or nuture?  Here's a fantastic paper (pdf) that  gives an economic perspective.
Everyone agrees that there's a strong correlation between parents' socioeconomic status and that of their children in later life. But does this come from genes (wealthy parents have "good genes" that they transmit to their kids) or environment (wealthy parents encourage schooling and give children confidence to learn and get good jobs)?
To find out, the authors looked at the link between parents' years of schooling and childrens' years of schooling for children brought up by their biological parents, and those brought up by adoptive parents.
If genes were all that mattered, you'd expect the education of biological parents to affect children's outcomes whether they were adopted or not. If nurture were all that mattered, you'd expect biological parents' education to have no effect on the outcomes of adopted children.
So, what did they find? That biological parents' education mattered even for adopted children.
For adopted sons, an extra year of biological fathers' education added 0.12 years to their own education. This is over half the effect (0.2) of sons raised by their biological fathers. And it's bigger than the coefficient on the adopted fathers' education (0.08).  Biological mothers' education has twice the effect upon adopted sons' education as adoptive mothers' does.
What's more, the effects of biological fathers' education upon adopted sons' earnings are twice as big as the effects of the adopted father's education.
The message here seems to be that pre-birth factors (including genes) are more important than upbringing.   
And here's the punchline. The data come from Sweden, where the government has traditionally made more effort than most to raise the life-chances of people from poor backgrounds. Draw your own inferences. 

Tammy was right

Tammy Wynette was right. Sometimes it's hard to be a woman. You'll have bad times. He'll have good times. Two papers in the latest Economic Journal show this*.
First, Helene Couprie shows (draft here) that British women in couples do nine hours a week more housework than men, and have less leisure time. As a result, they get less than half the well-being of the couple.
Second, Olivier Donni (early draft here) shows that men gain more than women from a rise in household income. In France, women get only 120 euros of a 1000 euro rise in men's wage earnings, and only 390 euros of a 1000 euro rise in the households' non-wage income.
This might help explain why marriage rates are falling - if the offsetting benefits to women of entering marriage have fallen (say because their own wages have improved), there'll be more women for whom the cost of marriage exceed the benefits.
Mostly, though, it's just an excuse for showing this. And no mention of Tammy would be complete without reference to one of the greatest acts of genius in English history.
* Grammarians will recognize this as bathos.

Why are marriage rates falling?

The proportion of people getting married in England and Wales has reached a record low. In 2005, just 21.6 women per 1000 singletons got hitched. That's the lowest proportion since records began in 1862, and is only half the post-1862 average; the fall seems to have started in the early 1980s.
This is weird because there's now strong evidence (pdf) that being married makes you richer, happier and healthier.
So why is there less marriage? Economics suggests several reasons, aside from the dull fact about it being more highly taxed:
1. Technical progress in home appliances means we need spend less time on housework. This makes it easier for single people to keep a home. A bloke doesn't need a housewife so much.
2. The increased number of women workers makes it easier for men and women to meet. This means the transactions costs of getting sex in the marketplace have fallen, so there's less need to get it through a contract; this is the Coasean argument.
3. The covariance between men's and women's earnings has increased, at least between the men and women who are likely to marry. This means marriage has become a less efficient way of spreading consumption risk.  If the missus loses her job at the same time you lose your's, one value of marriage - risk-sharing - is lost. This is the downside of assortive mating.
4. People anticipate more uncertainty - say because the greater possibility of changing career or location in their lives increases the chance of their personality changing. This reduces marriage, because it increases the expected probability of the merger failing.
5. Increased inequality among men  increases women's incentives to wait for Mr Right. This is just a natural application of real options theory. If there's more chance of a rich Mr Right coming along, women will hold onto their call option on marriage rather than exercise it early. Eric Gould and Daniele Paserman explain here (pdf).
6. Women's better employment prospects mean there's less need for them to marry to get a meal ticket. This paper shows that there's a strong relationship between good female labour markets and lower marriage rates.
You're right - there's not much romance in economics, is there?

Lone parents and crime: second thoughts

Can I clarify a few point about lone parents and gun crime?
I was worried by Ross's comment that "those involved with gun crime tend to have grown up fatherless" because some would infer from this a strong causal link from single parenthood to crime. Such an inference, I feared, would lead to three problems:
1. It would encourage the stigmatizing of single parents, the vast majority of whom are doing a fine job.
2. It would lend a spurious justification to tax breaks for married couples. Politicians would justify these on the grounds of social policy - encouraging families to stay together - rather than recognize them for what they are - hand-outs to the median voter.
3. It might lead to policies to compel fathers to stay in dysfunctional families. This would give kids bad role models, and lead to many being brought up in violent homes; for me (and I suspect countless others), it was a good thing that my dad left home.
Cameron seems not to be committing the first error. But he is committing the second and third.
Now, Daniel Finkelstein and several commenters point out that my rough calculations are consistent with the proposition that people from single parent families are more likely to commit crime than ones from two-parent ones. I never meant to disagree. But:
1. We're talking low odds. It's true that a 12-1 horse (to take Danny's hypothetical number) has more chance of winning a race than (say) a 50-1 one. But equally, neither has very much chance of winning. Mark, in a comment on my post, makes a nice analogy here. Even if only a tiny fraction of skiers break a leg, he says, it's still true that skiing leads to broken legs. I agree. But equally, it's the case that the risk is so small that skiing is a perfectly reasonable thing for people to do.
2. It doesn't follow that single parenthood causes crime. As Mark also points out, it might be that the sort of man who fathers a child and leaves home is irresponsible and reckless. If his children inherit these traits, they might become criminals, without there being a causal role from family structure to crime.
This point bears upon Danny's hypothesis that "reducing single parenthood would reduce gun crime." It's not necessarily true that all ways of reducing single parenthood would reduce crime. If this point, and point 3, are right, we wouldn't reduce gun crime by compelling fathers to stay with families. But we might reduce it by stopping such men fathering children in the first place; I have no problem with a Pigouvian tax upon such men.
There's another reason why I don't want to focus upon single parents here. It's too easy an answer.
Economics tells us that people commit crime because the benefits exceed the costs. This suggests that a bigger cause of crime is the combination of the collapse in demand for unskilled work and the awful education of poorer kids - which make legitimate ways of earning money hard to find - and the high aspirations encouraged by capitalism and celebrity culture.
Insofar as it focuses upon single parents, the stupid party therefore acts like a bully, attacking the vulnerable whilst cringing towards power.
As I asked, has Cameron really changed since he was in the Bullingdon?

Child well-being: blame the parents

This Unicef report (pdf) on the well-being of UK children, summarized here, looks grim. But it condemns parents and society more than it does the government.
Yes, the UK comes 18th of 21st on Unicef's measure of material well-being. But this is largely because of high (relative) child poverty in 2000. Since then, though, the child poverty rate has fallen (table 3.1 of this pdf). And on other measures of wealth - self-reported affluence and possessions - the UK comes mid-table (figure 1.3).
Nor is it obvious from the report that state education is disastrous. Yes, the UK comes 17th of 21 for educational well-being. But this is largely because of high numbers of 15-19 year-olds not in education, employment or training (the NEETs). The UK actually - surprisingly? - scores above-average on the educational achievement of 15-year-olds (figure 3.1).
Instead, where the UK does awfully is in family and peer relations (more children live in single-parent or step-families and fewer have friends they can trust), behaviour (the ones who aren't drunk, high or lard-buckets are shagging like rabbits), and subjective well-being (mainly poor health).
But these are - surely - areas where parents can do more than government. Many, however, seem to be failing in their duties.
And "duties" is the key word. Some people seem to think they have an untrammelled right to bring children into the world in the expectation that the tax-payer will pick-up the bill. But this is a  perversion of the meaning of liberty.
John Stuart Mill was explicit here:

It is in the case of children, that misapplied notions of liberty are a real obstacle to the fulfilment by the State of its duties. One would almost think that a man's children were supposed to be literally, and not metaphorically, a part of himself, so jealous is opinion of the smallest interference of law with his absolute and exclusive control over them; more jealous than of almost any interference with his own freedom of action: so much less do the generality of mankind value liberty than power...
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...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: and whether such laws be expedient or not (a question mainly dependent on local circumstances and feelings), they are not objectionable as violations of liberty.

With a few good exceptions, most people fail to see Mill's point that parenthood is a duty, not a right. Is it too much to hope that the Unicef report will cause them to reconsider, and focus more upon the real duties of parents than upon the imagined duties of tax-payers and the government?

Is education a positional good?

Mick Hume rails against the idea of increasing “parent power” in schools:

All sides appear to share the underlying assumption that increased parental involvement in schools is an intrinsically good thing. The results, however, have been rubbish.

One important issue he omits here is: why do parents want a good education for their children? The answer isn’t obvious. There are two possibilities.

One is that parents want their children to develop into a well-educated cultured persons. The other is that they want them to “get on in life.”

The distinction matters. You can get on in life with a poor education, if everyone else’s is even worse; in the land of the blind…But the former requires genuinely good schooling.

If parents see education just as a positional good, they’ll be happy with a poor school, as long as it’s a relatively good one. Why should public policy pay any heed to this preference?

Worse still, this paper (pdf) suggests that over a third of people do regard education as a positional good.

Here’s my challenge. Say I were to claim the following: lots of middle class parents care only about the relative quality of their child’s education, not it’s absolute level – they’d prefer a bad school for their kids with every other school even worse to a good school with every other school just as good. What evidence could you provide to prove me wrong?