Family Structure: Marriage and Children

Part III of Social Economics continues with a focus on families. Social, technological, and economic forces have led to dramatic changes in family structure over the past century, including more recently in developing countries such as China. Marriage is delayed, fewer children are born, and more is invested in each child. Combined with rapid growth in the retirement age population and longer lifespans, most economies are experiencing labor shortages, difficulty funding social services, and a host of other maladies. While the forces leading to these changes are myriad, dramatic shifts in family structure have as much to do with economic forces as they do with social change. In all economically developed and advanced developing economies around the world, declining birth rates go hand-in-hand with increases in wages and the lifting of social and legal restrictions on women in the workforce. Rising wages entice more into the workforce and increase the opportunity cost of caring for children. The rise in labor-force participation among women is also facilitated by greater cultural acceptance of women in professional roles not previously open to them. Explicitly recognizing the bidirectionality between family and economy greatly adds to our understanding of economic and social dynamics.