Friday, August 25, 2006

On Gary Becker's Model of Sexual Division of Labor

(Explanation of this post: To show you why it's not that easy to present quick and precise criticisms of misused scientific references on a blog)

Michael Noer has a penchant for appealing to Gary Becker's models of marriage in his writings about the similarities between wives and prostitutes and in why men shouldn't marry "career girls" (which turns out to be women who can earn more than thirty thousand dollars a year). Given this, it might be useful to discuss Becker's basic model of marriage in a little more detail. The snag is that it's in a mathematical language and most non-economists are probably not going to be able to follow the arguments in that form. But here is a verbal summary of the model and some criticisms of it. I hope that this satisfies those of you who want to see more criticisms of Mr. Noer's sources.

Becker's Basic Model

Gary Becker was the first economist to explicitly model household formation and division of labor within it. He regards the division of labor in families as an outcome of optimizing behavior within the framework of household production.

The household production treats families as small "firms" which produce fundamental consumption commodities (e.g. seeing a play or enjoying a meal) from purchased inputs (e.g. cab drives and tickets for the play and food ingredients, crockery and household equipment for the meal) and the family members' own time. The time used is modeled along the lines of labor use in real business firms.

A family consisting of two adults (usually seen as a married couple) must decide how to allocate the members' available time. Roughly, the needed time inputs are of three types:
- time spent working in the labor market,
- time spent working at home (in household production) and
- leisure time.
The allocation of time inputs depends on three factors:
- the opportunity costs of that time (i.e. its value in alternative uses)
- the productivity of that time input, and
- the members' own preferences (what they desire to do with their time).

Becker's model says nothing about the members' own preferences, which means that the model cannot answer the question how different preferences would affect the model's conclusions. Instead, he concentrates on the following two questions:

1. Assuming that the family consists of an adult male and an adult female with children (either already present or planned), under what conditions will the spouses specialize in market and nonmarket work? In other words, when will one spouse stay at home full-time and one spouse work outside the home full-time?

2. If specialization occurs, what determines which spouse works in the market and which spouse works in the home?

Becker's model has the following major results:

1. If the household production function allows for complete specialization, AT LEAST one spouse specializes in either market or nonmarket work, provided that he or she also has a comparative advantage in the market or in the home production. (Complete specialization by at least one spouse also results if no comparative advantage exists but the markets discriminate against one spouse).

2. This specialization implies that married women would not specialize in market work (although they could work both at home and in the market) and married men would not specialize in work at home (although they, too, could work both at home and in the market) IF women have a comparative advantage in home production (even if both spouses command the same wage offers) because of biological differences ("biology is destiny").

This is the basic Becker model. Later modifications try to alter the model to explain better the fact that most couples don't specialize in the ways his initial model explains.

Criticisms of the Model

Economists have criticized Becker's model in various ways which can be divided into three general classes:
a) criticizing the modeling approach
b) criticizing the comparative advantage assumption which drives the results
c) criticizing the model's predictive power in empirical work

The first of these classes isn't as technical and uninteresting as it might appear. Indeed, these are the most important criticisms of the model, because they argue that Becker is not modeling marriage correctly to begin with. Most of them focus on one troubling aspect of the model: That it assumes the little family firm never disagrees on its objectives. Becker avoids the modeling problems of allowing the spouses to have different desires (preferences) by stipulating that the family's objectives are those of a benevolent dictator.

But this assumption really assumes away most interesting questions about what goes on in marriages. Note that we can't ask the model to tell us how the members of a family arrive at their mutual decisions, including the decision to allocate labor into either market work or household production, because Becker assumes that no negotiation is needed. Neither are the different household members allowed to like or dislike market work or household chores. And because the dictator is assumed to be benevolent, Becker's model cannot say anything about dysfunctional families. Most importantly, the model cannot handle divorce, because it really is no different from a model of one person (the family patriarch) who has access to the resources of the whole household.

There are better models for the purpose of explaining marriage than Becker's model. But Michael Noer probably never heard of the household bargaining models. Their conclusions are much less clear-cut, though, because they allow for more realistic differences between the spouses.

The second group of criticisms of the basic model addresses the idea that it's women's comparative advantage in household production which produces the conclusion that men would be more likely to work in the market and women at home, even if women are not discriminated against in the marketplace. This assumption sounds fancy, but all it really refers to is the idea that women are better with children than men.

What does this idea really mean in the terms of the model? Either Becker assumes that women are pregnant or breastfeeding almost all the time (not a good assumption in countries with contraception) or it assumes that fathers can't be substituted for mothers in hands-on parenting AND that childcare by others than the parents is also inferior. All this is an empirical question which could be answered by a lot of study, but it's not something that one should just ASSUME as Becker does.

The third group of criticisms has to do with the fact that Becker's model doesn't predict reality very well. As an example, the economic developments in German and American labor markets in the 1960s and 1970s were fairly similar, and if Becker's model was valid we should have observed very similar changes in female labor market participation rates in the two countries. This is not what actually happened. Even more generally, the model has not fared well in empirical tests.