Economics and Family Structures

Abstract

Household decisions are one of the key elements impacting many dimensions of any economy. or instance at the macro level, decisions regarding how much to save affect the economy’s investment possibilities or decisions regarding children’s education affect the overall level of human capital. Economists who study household behavior have almost solely focused on the understanding of nuclear families, i.e., parents living with their own children, childless couples, or singles. However, it is well documented that family types are heterogeneous across and within countries, both in the past and in present times. Among the different types, a classical distinction can be made between nuclear, stem, and complex households. Stem families are those allowing for three generations to live in a same household. Complex families allow for several married siblings to live together in a household. It is important to note that this is not a marginal phenomenon. For instance in China or India, the two most populous countries in the world, the majority of the population lives in either stem or complex families types. However, there is still a lot to understand about them. What are the driving factors leading individuals to form one type of family over another? Are these drivers economic or cultural? What are the intra-household dynamics of these families and how do they function? What are the implications of these differences for implementing effective family policies? The focus on nuclear families limits our capacity to answer these questions and to analyze the impact of institutional phenomena or public policies. More research to understand the determinants and functioning of other types of families hence matters both from an academic and a policy perspective.