Family economics

Family economics

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The family
In human context, a family is a group of people affiliated by consanguinity, affinity, or co-residence. In most societies it is the principal institution for the socialization of children...

, although recognized as fundamental from Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

 on, received little systematic treatment in economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

  before the 1950s. A significant exception was Thomas Malthus's model of population growth. The work of Gary Becker and others initiated contemporary research on family economics with the application and extension of microeconomic theory
Microeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...

 and empirical methods. Standard aspects include:
  • fertility and the demand for children in developed and developing countries
  • child health and mortality
  • interrelation and trade-off
    A trade-off is a situation that involves losing one quality or aspect of something in return for gaining another quality or aspect...

     of 'quantity' and 'quality' of children through investment of time and other resources of parents
  • altruism
    Altruism is a concern for the welfare of others. It is a traditional virtue in many cultures, and a core aspect of various religious traditions, though the concept of 'others' toward whom concern should be directed can vary among cultures and religions. Altruism is the opposite of...

     in the family, including the rotten kid theorem
    Rotten kid theorem
    Gary Becker's theorem of social interaction, colloquially known as the rotten kid theorem, suggests that family members, even if they are selfish, will act to help one another if their financial incentives are properly linked....

  • sexual division of labor, intra-household bargaining
    Intra-household bargaining
    Intra-household bargaining refers to negotiations that occur between members of a household in order to arrive at decisions regarding the household unit....

    , and decision making through the household production function
    Household production function
    Consumers often choose not directly from the commodities that they purchase but from commodities they transform into goods through a household production function. It is these goods that they value. The idea was originally proposed by Gary Becker, Kelvin Lancaster and Richard Muth in the mid...

     and outside the household.
  • mate selection
    Assortative mating
    Assortative mating , and the related concept Disassortative mating, is the phenomenon where a sexually reproducing organism chooses to mate with individuals that are similar or dissimilar to itself in some specific manner...

    , search costs, marriage, divorce, and imperfect information
    Perfect information
    In game theory, perfect information describes the situation when a player has available the same information to determine all of the possible games as would be available at the end of the game....

  • family background and opportunities of children
  • intergenerational mobility
    Intergenerational Mobility
    Inter-generational mobility is a measure of the changes in social status which occurs from the parents' to the children's generation. It can affect anyone in the population, as one’s economic standing can increase or decrease from the position they were born into...

     and inequality, including the bequest motive
    Bequest motive
    A bequest motive seeks to provide an economic justification for the phenomenon of gratuitous, intergenerational transfers of wealth. In other words, to explain why people leave money behind when they die....

  • human capital
    Human capital
    Human capitalis the stock of competencies, knowledge and personality attributes embodied in the ability to perform labor so as to produce economic value. It is the attributes gained by a worker through education and experience...

    , social security
    Social security
    Social security is primarily a social insurance program providing social protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:...

    , and the rise and fall of families
  • macroeconomics of the family.

See also

  • Demographic economics
    Demographic economics
    Demographic economics or population economics is the application of economics to demography, the study of human populations, including size, growth, density, distribution, and vital statistics.Analysis includes economic determinants and consequences of:...

  • Economic imperialism (economics)
  • Hypergamy
    Hypergamy is the act or practice of seeking a spouse of higher socioeconomic status, or caste status than oneself....

  • Cost of raising a child
    Cost of raising a child
    The cost of raising a child varies from country to country.-Developing countries:According to, "Almost half the world — over three billion people — live on less than $2.50 a day." This statistic includes children. On this number, it costs roughly US$900 to raise a child for a year,...

  • Partner effects
    Partner effects
    Partner effects refer to the ways in which a spouse or consensual mate influences the life of their significant other. More specifically, the effect a partner has on another's career and overall occupational status...