Oldest pin factory!

This post will quote extensively from two excellent articles on the changing nature of marriages and families in the modern economy.

Slate has excerpts from Tim Harford's latest book, The Logic of life. In a rational analysis of the origins of marriage and family life, with its utility in distribution of household labor within family members in the old, self-contained societies, he calls family the "oldest pin factory of all".

Sample this, "Marriage used to be one of the fundamental ways to gain from division of labor. Before there were well-developed markets for anything much, and long before you could order a cappuccino, men and women were able to enjoy some of the gains from the division of labor by getting married, specializing, and sharing. Back on the Savannah, one might hunt and the other might gather. In the more recent past, one might be good at guiding a plough and sewing while another would specialize in cooking and household repairs. Nothing about Adam Smith's story suggests division of labor according to traditional sexual roles, but make no mistake: the family has rational roots. It is the oldest pin factory of all."

"By the 1950s, those traditional sexual roles were fundamental in the division of labor within marriage. The ideal husband specialized in breadwinning, getting an education, a good job, working whatever hours were necessary to win promotion, and earning ever more to supply the family with a car, a fridge, a nice house in the suburbs and frequent holidays. His adoring wife specialized in homemaking, cooking, cleaning, entertaining, bringing up the children to be smart and wholesome and taking care of her husband's emotional and sexual needs."

"Instead, the divorce revolution was driven by a more fundamental economic force: the breakdown of the traditional division of labor identified by Adam Smith. At the beginning of the 20th century, housework took many hours, and only the poorest and most desperate married women had jobs. As the decades rolled past, technological change made housework less time-consuming. It became easy—and quite common—for older women to enter the workforce after their children were grown and housework was easily manageable.

Once divorce rates first began to climb, it was no surprise that they increased dramatically. There was a rationally self-reinforcing loop at work: the more people divorced, the more divorcees—that is, potential marriage partners—you could meet. That meant that it was easier to get divorced yourself and find a new spouse."

Another interesting article on this is by Justin Wolfers and Betsey Stevenson. They write that families had played a crucial role in "flling in" where incomplete market institutions would otherwise have hindered economic development, "For example, even in the absence of well-functioning contract law, families found ways to enforce agreements among kin. This naturally gave the family a role as an organizing device for economic activity, and the limits of the firm often coincided with the limits of the family. Thus marriage also provided the key means to strategic “mergers” — a way to form alliances and boost the financial welfare of the household... prior to the expansion of the welfare state, the family had been a key provider of insurance, as spouses agreed not only to support each other “through richer, through poorer, in sickness and in health,” but also extended this guarantee to parents, children, and siblings. Before modern credit markets arrived, access to capital was often facilitated through family ties... A number of goods and services, such as freshly-cooked meals, or childcare, were historically not sold in the market sector. Thus, the family became the firm producing these household services."

"Just as Adam Smith observed that specialization by workers in the pin factory yielded more efficient production, so too families were organized so as to reap the benefits of specialization. Thus households came to involve the specialization of one spouse, typically the husband, in the market, and the other in the domestic sphere." But increasingly the market has developed and started to occupy more of the space traditionally held by the family, and the modern corporation has come to supplant the family firm as the key unit of production. Social insurance has provided social security, and other technological, legal and social changes have reduced the value of specialisation within families. Services previously produced in the home are now freely traded in the market.

Wolfers and Stevenson writes, "While the benefits of one member of a family specializing in the home have fallen, the costs of being such a specialist have risen. Advances in medicine have yielded rising life expectancy, ... thereby increasing the number of potential years in the labor force, and also the opportunity cost of women staying out of the labor market to be home with children."

They claim that the economic logic that drives modern marriages is "shared consumption", as opposed to "shared production" till now. They write, "Most things in life are simply better shared with another person: this ranges from the simple pleasures such as enjoying a movie or a hobby together, to shared social ties such as attending the same church, and finally, to the joint project of bringing up children. Returning to the language of economics, the key today is consumption complementarities — activities that are not only enjoyable, but are more enjoyable when shared with a spouse. We call this new model of sharing our lives “hedonic marriage”."

"Hedonic marriage is different from productive marriage. In a world of specialization, the old adage was that “opposites attract,” and it made sense for husband and wife to have different interests in different spheres of life. Today, it is more important that we share similar values, enjoy similar activities, and find each other intellectually stimulating. Hedonic marriage leads people to be more likely to marry someone of their similar age, educational background, and even occupation. As likes are increasingly marrying likes, it isn’t surprising that we see increasing political pressure to expand marriage to same-sex couples."

About the alleged rise in divorce rates they write, "Yet the high divorce rates among those marrying in the 1970s reflected a transition, as many married the right partner for the old specialization model of marriage, only to find that pairing hopelessly inadequate in the modern hedonic marriage. Divorce rates have actually been falling since reaching a peak thirty years ago. And those who have married in recent years have been more likely to stay together than their parents’ generation. These facts should be emphasized and bear repeating — divorce has been falling for three decades — since this important fact is often ignored in the discussion of the current state of the family."

About the changing demographics of marriage they write, "College-educated women used to be the least likely to marry, and today they are about as likely as those without a college degree to marry. Several decades ago, a woman earning a graduate degree was unlikely to find the old specialization model of marriage to be useful, and many therefore chose to remain single. But today’s hedonic marriage is likely more enticing for educated women.

On the flipside, the decline in marriage among less-educated women would be an important concern if we were still in the world where women needed a husband for financial security. Less educated women have their own market opportunities available to them and have less to gain from marrying today than in the past. The new hedonic model of marriage thrives when households have the time and resources to enjoy their lives. This suggests that increasing the financial stability of these households will lead to marriage rather than marriage leading to financial stability."