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 5: Children

Francisco Cabrillo

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

Extract

1  FAMILY AND CHILDREN The family has always been and continues today to be the institution in which children are usually born, grow up and receive their initial education. From the economists’  point of view, therefore, the family ‘produces’ children, not only in the sense of conceiving them, but also in that the family strives to improve the children’s ‘quality’  through heavy investments in time and money. Many different circumstances influence a person’s development but they are often directly conditioned by the parents. It is the parents who transmit the genes to their  children that will determine their physical appearance, intelligence and health. But biological characteristics are by no means all. Parents also offer their children the  whole framework in which their intellectual, artistic and emotional qualities will develop. The family is an educating influence both for good and bad. It is no accident  that several members of the Bach family were famous musicians or that the Bernouilli family gave the world excellent mathematicians. Neither is it unusual for the  children of criminals to turn into criminals too. Therefore children do not only receive a biological inheritance from their parents. They also receive an endowment of human capital which will condition to a large  extent both their behaviour and their income levels in the future. As for the children, they offer several types of compensation to their parents. These compensations have varied in nature and importance throughout the course of  history and, in today’s developed world, consist basically of psychological...

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