Some Evolutionary Economics of Family Partnerships Ted Bergstrom

Some Evolutionary Economics of Family Partnerships Ted Bergstrom, UCSB

An Arboreal Allegory • Alice and Bob live on fruit and berries. • They get cold at night. • Alice is a skilled fire-builder. Bob is not.

Primitive cooperation • Alice divides her time between gathering food and building fire. • Bob doesn’t try building fires. He spends all of his time gathering food and he huddles next to Alice’s • And wishes she would build a bigger fire. • Bob leaves some food by the fire for Alice. • He benefits because Alice makes a bigger fire. (income effect of food Bob leaves)

Too Little Fire • No love or altruism is involved. Both benefit from Bob’s gifts to Alice. • But there is still an undersupply of fire. • Alice accounts only for her own benefit when deciding how much fire to build. • A scheme where Bob pays Alice a wage that depends on how much wood she gathers would make both better off. • But this requires monitoring that may not be possible.

Case of common interests • Suppose that all that Alice and Bob really care about is the size of the fire. • They want food only because it gives them strength to do their work. • Then Alice and Bob have dominant strategies. • Bob eats enough to maximize the amount that he can give to Alice. • Alice eats enough to maximize the size of fire that she can build. • Both agree about what each should do. Outcome is efficient.

How are children like fire? • Suppose the household good is children, who share genes of two parents. • Evolutionary theory predicts selection for behavior that maximizes surviving descendants. • Consumption of goods not an end in itself, but an instrument for reproductive success.

Monogamy • Lifelong monogamous couples share identical reproductive goal. • Each is a perfectly motivated agent of the other’s reproductive success. • Common interest may be evolutionary foundation of conjugal love.

Snakes in Eden • In-law problem and theory of kinselection • Adultery • Divorce • Death and remarriage

The Mystery of the Demographic Transition • Rise of real wages and decline of net reproduction rate. – Western Europe 1870 to present – Late 20 th century much of Asia and Latin America • Puzzling to zoologists. How could natural selection produce a creature that reduces fertility when resources are abundant?

Economists’ Explanations • Price effects. Children are labor intensive goods. As wages rise, their cost rises. – Requires price elasticity of demand for children to exceed income elasticity – Hard to reconcile with cross sectional data • Technology has increased payoff to human capital, making it more desirable to have fewer, but better-educated children. – But historians claim skill premiums actually fell from 18 th century to present. (G. Clark)

Evolutionary explanations? • If joint reproductive success is ultimate motivation of couples, reproduction must eventually rise with wages. • No evidence that this is happening. • Perhaps conditions are so different from historic evolutionary environment that our actions result of misreading cues.

Another explanation • Humans evolved with less than complete monogamy. • Conflict of interest between males and females. • An additional child is more costly to female than to male. – She may die in childbirth – Siblings suffer: They are surely hers not so surely his.

Household Conflict • Empirical studies show pattern of household expenditures depends on which household member has the earnings. • If wife has larger share of household income, more is spent on child health, food, and education. • Theory that shares of income influence bargaining power in family decisions.

Tug of War • If males prefer shorter birth intervals than females, outcome will be result of a tug of war between conflicting interests. • Evolution might favor females who prefer birth rates lower than their true genetic interest and males prefer rates that are higher than their preferred rates. • Differences in birth rates might reflect shifts I power between the sexes.

Power Shift Theory A contributing factor to the demographic transition may be that: 1) Mechanization has made the skills of females more valuable relative to the brute strengh of males. 2) Power and influence has shifted from males to females. 3) With their increased influence, females have shifted family decisions to lower fertility