The Economics of the Family and Family Policy

The Economics of the Family and Family Policy

Francisco Cabrillo

This comprehensive and authoritative book offers a global approach to the modern economics of the family, family law and family policy. Beginning with the division of labour in the family, this book deals with the economics of marriage, the demand for children, inter-generational relationships, and the economics of inheritance. The family is analysed using the theory of utility maximisation assuming that individuals wish to achieve the greatest possible satisfaction with limited resources and imperfect knowledge. The family is examined from both long and short term perspectives, and it is assumed that the family is cooperative with incentives for altruistic behaviour greater than in any other social group.

Chapter 2: The Family as an Economic Unit

Francisco Cabrillo

Subjects: development studies, family and gender policy, politics and public policy, public policy, social policy and sociology, family and gender policy

Extract

Page 19 2.  The family as an economic unit. 1  ECONOMIC ORGANIZATION AND THE FAMILY At the close of the twentieth century, family structure and the changes that have recently been taking place in the family in the western world have become very relevant  for understanding developments in contemporary economic market systems. This statement may seem surprising because modern social organization has meant that the  family is no longer carrying out many of its traditional activities. But it is precisely this new, more limited social role that has given the family its protagonism.  The economic system in which we live is based on a specific family organization which, when altered, casts doubts on many of our longstanding assumptions. Many  studies have been carried out on the adaptation of the family institution to the new methods of social organization for production. But not much attention has yet been  paid to the reverse influence. And this is also very important because if family structure changes, the economic system will necessarily be affected.  A simple example should clarify these ideas. Let us think of the effects of a high rate of unemployment over a long period, a well­known phenomenon in many  European economies. In a family in which only the father works in the market and in which the wife and children have no independent income, if the father were to be  unemployed for a long period this would be likely to have serious effects. But in crisis situations there may be...

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