Pragmatic Pluralism 7: Households

This chapter provides a map through the complex jungle of economic theories. There are many different theoretical approaches, and each aspect of the economy has been analysed by a number of different ones. However, it is neither feasible nor productive for students to engage with every possible angle for every topic. Hence, the chapters on different topics, together with Building Block 8: Economic Theories, sets out an alternative approach: pragmatic pluralism. Rather than pursuing the extreme of either only focusing on one approach, or including every possible strand of thought for every topic, we propose a pragmatic middle ground: teaching a select number of approaches for each topic. In this way, it is possible to introduce students to the variety and diversity of economic thinking, whilst still having enough time and space to properly discuss each of the insights in detail with them.

Topics:

Main opposing perspectives

■ Feminist economics: Unequal division of unpaid labour

■ Neoclassical economics: Rational utility maximization within the household

Main complementary perspective

□ Cultural approach: Household relations vary strongly between cultures

Additional perspectives and insights

+ Marxian political economy: Class fundamentally shapes the meaning of gender

There are two dominant ways of looking at what happens in the household, one emphasizing choice and the other stressing constraints. The feminist view emphasises social relations in which power asymmetries and gender roles play an important part. The neoclassical view assumes rational decision making through which utility is maximized.

Feminist economics analyses how patriarchy shapes the economy and gender relations inside households play a key role in this. Gender inequalities have both material aspects with unequal income and wealth distributions, as well as cultural aspects, with gendered notions of ‘good’ behavior. While self-interested behavior, for example, is more often encouraged for men and seen as masculine, altruist behavior is often imposed on women and seen as feminine. 

Relatedly a key insight of feminist economics is that unpaid labour, often seen as altruist behavior, is disproportionately performed by women. Furthermore, time budget studies show that many women work double shifts, one paid and the other unpaid, while this is less the case for men. Unpaid labour, such as caring for others, is critical to human wellbeing, the development of human capabilities and the functioning of the economy as a whole. But while these unpaid economic activities are largely ignored in national account statistics, estimates suggest that they may even amount to about half of all economic activities (OECD, 2018).

In contrast to feminist economists who emphasize unequal economic bargaining power between men and women, some neoclassical economists suggest the gendered division of paid and unpaid labour is efficient. Because of natural differences and individual characteristics, women are assumed to be (inherently) more productive in unpaid labour tasks, while men are better at performing paid labour, explaining the gendered division of paid and unpaid labour. 

Within neoclassical economics, households can be modelled as unitary actors in which the head of the household is assumed to maximize the collective utility. Another option within neoclassical economics is to see households as places where rational game theoretical bargaining, in which everyone maximizes one’s own utility, takes place. These models try to model how contextual institutional factors and differences in individual assets can explain intra-household negotiations and decisions.

A key characteristic of the neoclassical approach to households, sometimes referred to as the new home economics, is that they conceptualize household labour divisions as rational market transactions. As such unpaid labour, such as raising children, in this approach is understood as ‘production of human capital’ and marriage decisions are understood akin to negotiations about the business contracts resulting in an efficient division of labour. Becker (1976, p. 10), for example, wrote: “According to the economic approach, a person decides to marry when the utility expected from marriage exceeds that expected from remaining single or from additional search for a more suitable mate. Similarly, a married person terminates his (or her) marriage when the utility anticipated from becoming single or marrying someone else exceeds the loss in utility from separation, including losses due to physical separation from one’s children, division of joint assets, legal fees, and so forth. Since many persons are looking for mates, a market in marriages is said to exist.”

Economics is not the only discipline studying households and families, as they have been core topics of the discipline of sociology. Within the sociology of families, there are various theoretical frameworks, from structural-functionalism and life course theory to symbolic interactionist, or cultural, approach. There are also feminist and social exchange theories, which largely overlap with respectively feminist and neoclassical theories about the economics of the household. 

A key insight of the cultural approach is that conceptions about what the family is and how it should function are subject to socio-historical change and are crucial determinants of what goes on in the family. Over the last decades, developments such as the rise of women performing paid labour, divorce, cohabitation, and same-sex marriage, have fundamentally changed how families look. Besides the traditional nuclear family, other family structures such as the single parent, step, foster, adoptive, extended, informal, and transnational family, have become more prevalent. Accompanying these changes in family structures, it is found that the gender conceptions of men change at a slower pace than those of women, giving rise to discrepancies of expectations and preferences. These gender conceptions relate to ideas about the “breadwinner”, motherhood, work and relationship quality, household utility, gendered separate spheres, and male privilege, and influence decisions concerning relationship timing and childrearing as well as education and employment.

Marxian political economy: Despite its often acknowledged central role in the economy, the household has had a relatively marginal role throughout the history of economic thought. A key exception is the innovative group of (female) consumer and household economists at the University of Chicago during the early 20th century with Hazel Kyrk, Margaret Reid and Elizabeth Hoyt. Although they themselves were often critical of the ability of neoclassical theory to explain consumption and household decisions, for example because of the influence of advertising, their theoretical and empirical work was a key source of inspiration for the new home economics that was later developed at Chicago. Various Marxian scholars, sometimes called Marxist-feminists, also for an important exception as they looked at the household, and, in particular, how class and gender inequalities are similar and different, and interact with each other. A key insight from this literature is that class, as well as race, fundamentally alters the meaning and implications of gender, as later also emphasized by intersectionality scholars discussed in more detail with the topic ‘Inequality’. What being unemployed means is for someone’s career, family life and wellbeing, for example, highly different for men and women, but so for working and middle-class women.

A core argument of early Marxian thinkers, such as Bebel, Engels and Luxemburg, was that the gendered division of labour is not ‘natural’ and, instead, is socio-historical specific, being a core element of how the economy is organized. As such, they theorized that overthrowing capitalism would also result in the undoing of patriarchal institutions as well as class domination. Domestic labour was assumed to become increasingly commodified under capitalism and socialized under socialism. Raising and educating children would be done outside of the household by childcare and educational institutions, and housework would be done by communal facilities, rather than by women inside individual households.

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