Family Economics - Marriages As Firms

Marriages As Firms

The idea that marriages are like firms can be found in the work of New Home economists, Marxists, and feminists. Some Marxists and feminists view marriage of woman and man as analogous to the employment relationship in a capitalist society. A worker who doesn’t own any means of production is similar to a woman who can not earn enough income without a husband, so the husband in a family is like the capitalist of a company. An employment relationship between spouses also forms the basis of some analyses in the tradition of the NHE. For example, Shoshana Grossbard models both men and women as possibly hiring each other's work in household production, which she calls "spousal labor or "Work-In-Marriage". To the extent that husbands employ their wives' spousal labor and pay them a low "quasi-wage" for that labor the husband/wife relationship in this NHE-inspired model is similar to a case of wife's exploitation by husband, as formulated by Marxist-feminist economists.

Legal ownership of the household is a question related to the analysis of marriages as firms. Robert Ellickson has argued that owners of the household's capital should have more influence on decision-making related to the household than those who work in the household's production. In contrast, Grossbard has proposed that those doing the household's production should have more control over decisions than owners of the household's capital. This is another example of parallels between NHE economists and marxist-feminist economists.

The question of how work in domestic production by one spouse is compensated by the other spouse who benefits from the work amounts to establishing terms of trade in a situation of specialization and division of labor. Gary Becker has analyzed division of labor in the household in terms of comparative advantage, generally assuming that women have a comparative advantage in household production and men in production outside the home. This has led to a tendency for feminist economists to dismiss not only Becker's but also other NHE-inspired analyses of marriage.

Other economic explanations for marriage that have parallels in standard economic analyses of firms include explanations emphasizing risk pooling where the risks of illness or being unemployed is reduced with marriage, and the role of marriages in undertaking specific investments, like children.