Non-market Behavior Research Articles

Estimation of Fertility using a Stock-Adjustment Model

Develops a dynamic model of fertility behavior and estimates it empirically from 3 large interview studies. The decisions of couples regarding desired family size and desired spacings between children are considered at the same time. The specification of desired family size is based on the economic theory of the family that incorporates concepts of human capital allocation of time and nonmarket household behavior. Childspacing is estimated in the context of stock-adjustment model in which the variables that affect child spacing are included explicitly. The empirical results are consistent with a stock-adjustment framework because the estimated coefficients of the number of previous children (or number of living children) have negative signs that are statistically significant. The variables used for the estimate are fecundity variables contraception ever used date of birth and work status. The estimated coefficients generally have the expected signs and are statistically significant. The childspacing results expressed in terms of the proportion of respondents who had one child during the year and wanted one more child are reasonable. Virtually all the estimated results are in the 0-1 range. Estimates from all 3 surveys showed that the greater the number of additional children desired the more quickly the respondent acquires the next child. The effects of husbands and wives income showed similar patterns fertility usually being lowest in the intermediate income classes. Increased income may generate price effects that offset income effects in some ranges of income not only in terms of opportunity costs but in terms of the costs of raising children in a lifestyle similar to that of their parents. Educational variables were found to be inconsistent among the 3 surveys and not always significant. Taste variables (race religion and parity) had the expected effects. (Authors modified)

The Economics of the Baby Shortage

Although economists have studied extensively the efforts of government to regulate the economy, public regulation of social and personal life has largely escaped economic attention. With the rapid development of the economic analysis of nonmarket behavior, the conceptual tools necessary for the economic study of social (as distinct from narrowly economic) regulation are now at hand.1 Nor is there any basis for a presumption that government does a good job of regulating nonmarket behavior; if anything, the negative presumption created by numerous studies of economic regulation2 should carry over to the nonmarket sphere. An example of nonmarket regulation that may be no less perverse than the widely criticized governmental efforts to regulate imports, transportation, new drugs, bank entry, and other market activities is the regulation of child adoptions-the subject of this paper. Sometimes natural parents do not want to raise their child; the typical case is where the birth is illegitimate. And in some cases where the natural parents do raise the child initially, their custody is later terminated for one reason or another--death or other incapacity, abuse, or extreme indigence. In either case-the unwanted infant or the abused, neglected, or abandoned child-there are potential gains from trade from transferring the custody of the child to a new set of parents. Where the new parents assume full parental rights and obligations over the child, one speaks of adoption; where they obtain simply a temporary custody (usually being partially compensated for their custodial services by the state), one speaks of foster care. An alternative to foster care in a home is foster care in an institution.

HOUSEHOLD PRODUCTION AND NATIONAL PRODUCTION: AN IMPROVEMENT OF THE RECORD

Man may work from sun to sun, But woman's work is never done. Anon. It has become almost a cliché that measured growth in the U.S. is being overstated. The classic on the subject is by Mishan [5], who argues persuasively that the (uncounted) externalities from production in industrialized economies are overtaking the production which these economies are counting. But externalities are not the only problems in measuring economic activity and economic growth. Two other problems of equal importance, but more amenable to measurement, are the distinction between final and intermediate production, and the quantification of nonmarket productive behavior. In this paper, we concentrate on one aspect of the measurement of nonmarket behavior—the value of production at home by housewives.1Specifically, we will present estimates of the value of home based nonmarket production by housewives. These estimates will then be used to supplement various national product aggregates in order to calculate more accurate growth rates for the U.S. economy. We find that the value of nonmarket production by married women during the 1960's has averaged approximately thirty percent of the GNP and close to 40 percent of the national income. The inclusion of the nonmarket work of housewives in GNP would reduce the measured rate of growth of real GNP per potential worker by about ten percent, the exact amount depending on how the value of nonmarket work is estimated. Our estimates indicate a reduction in the absolute rate of growth of almost 0.25 percent.