“REQUIREMENTS OF THE FAMILY THAT FORMS: SOME ECONOMIC CONSIDERATIONS ”

““REQUIREMENTS OF THE FAMILY REQUIREMENTS OF THE FAMILY THAT FORMS: THAT FORMS:

SOME ECONOMIC CONSIDERATIONSSOME ECONOMIC CONSIDERATIONS” ”

Maria Sophia AguirreMaria Sophia AguirreDepartment of EconomicsDepartment of Economics

The Catholic University of AmericaThe Catholic University of AmericaWashington, DCWashington, DC

VI World Meeting of FamiliesVI World Meeting of FamiliesMexico, January 14-18, 2009Mexico, January 14-18, 2009

How Does Women Fit in the How Does Women Fit in the Economy?Economy?

Basic Basic ActivitiesActivities

Means UsedMeans UsedRole of the Role of the

FamilyFamilyPurposePurpose

ProductionProduction ResourcesResources Human CapitalHuman Capital Basic NeedsBasic Needs

ExchangeExchange MarketMarketHuman, Moral, Human, Moral, Social CapitalSocial Capital

ProfitProfit

ConsumptionConsumptionOptimization and Optimization and

DistributionDistributionAppropriate Appropriate distributiondistribution

WellbeingWellbeing

(welfare)(welfare)

Socioeconomic RelevanceSocioeconomic Relevance Children develop bestChildren develop best within a family that is functional, i.e., within a family that is functional, i.e.,

with their biological parents in a stable marriagewith their biological parents in a stable marriage

Marriage Increases likelihood of father having good relations with Marriage Increases likelihood of father having good relations with children.children.

Marriage reduces the probability of children divorcing themselves or Marriage reduces the probability of children divorcing themselves or becoming unwed parents.becoming unwed parents.

The The academic and social performanceacademic and social performance of a child is very of a child is very closely related to the structure of the family in which he lives closely related to the structure of the family in which he lives and this is important for the quality of human and social capitaland this is important for the quality of human and social capital

Divorce reduces the likelihood of children graduating from college and Divorce reduces the likelihood of children graduating from college and high school.high school.

Divorce increases risk of course failure.Divorce increases risk of course failure.

The The psychological stability and healthpsychological stability and health of a child is of a child is closely related to healthy families and this is important closely related to healthy families and this is important for worker productivity and government financesfor worker productivity and government finances

Children enjoy better physical health, on average, than other Children enjoy better physical health, on average, than other family forms.family forms.

Sharply reduces infant mortality.Sharply reduces infant mortality. Increases life expectancy, especially for menIncreases life expectancy, especially for men Associated with reduced abuse of alcohol, and substance abuse Associated with reduced abuse of alcohol, and substance abuse

for adults and teens.for adults and teens. Associated with better health and lower probability of injuries Associated with better health and lower probability of injuries

for both men and women.for both men and women. Lower levels of physiological distress and mental illness.Lower levels of physiological distress and mental illness. Mothers have lower levels of depression than single or co-Mothers have lower levels of depression than single or co-

habiting mothers.habiting mothers.

The breakdown of the family is a symptom of a sick and weak society

Abuse of women is 25 times more likely to occur in an irregular family.

Men who have witnessed domestic violence are three times more likely to abuse their own wives and children.

Substance abuse and teen-age pregnancy is higher in broken families.

Women and children of broken families have a higher probability of living in poverty.

Increase of the social welfare expenditures burden.Higher levels of suicide.Boys from single parents have are more likely to engaged

in delinquent and criminal behavior.

Family Constitution Family Constitution and and

Life StyleLife Style

Its impact in Numbers:Its impact in Numbers:

Long-Term Effects on Individual Long-Term Effects on Individual and Family Economic Wellbeingand Family Economic Wellbeing

Family Relationships and Its Relation to Family Relationships and Its Relation to the Frequency of Family Diningthe Frequency of Family Dining

(% of Teens)(% of Teens)

Source: National Center on Addiction and Substance Abuse, Columbia University.

51 48

19

72 69

7

0

10

20

30

40

50

60

70

80

Speak withParents when a

Problem

Parents BuildChildren

Character

Tension at Home

Pe

rce

nta

ge

0 to 2

5 to 7

40% 40%171%

Academic Performance and Its Relation Academic Performance and Its Relation to the Frequency of Family Diningto the Frequency of Family Dining

(% of Teens Obtaining Mostly A or B Grades in School)(% of Teens Obtaining Mostly A or B Grades in School)

4 5

6 2

0

1 0

2 0

3 0

4 0

5 0

6 0

7 0

0 t o 2 5 t o 7

Per

cen

tag

e

Source: National Center on Addiction and Substance Abuse, Columbia University.

38%

Substance Abuse and Its Relation to the Substance Abuse and Its Relation to the Frequency of Family DiningFrequency of Family Dining

(% of Teens Who Have Tried Abuse Substances)(% of Teens Who Have Tried Abuse Substances)

3 4

5 2

3 5

1 4

3 0

1 2 1 3

3 5

0

1 0

2 0

3 0

4 0

5 0

6 0

C i g a r e t t e s A l c o h o l M a r i j u a n a M o r e t h a nH a l f o f

F r i e n d s u s ed r u g s

Pe

rce

tag

e

0 t o 2 5 t o 7

Source:National Center on Addiction and Substance Abuse, Columbia University.

142%

73%

191% 169%

Percentage of Children Whose Families Percentage of Children Whose Families have Family Dining by Family Structurehave Family Dining by Family Structure

(% of children)(% of children)

45

13

0

5

10

15

20

25

30

35

40

45

50

Married Single-Parent

Per

ceta

ge

of

To

tal

sam

ple

Source: Administration for Children and Families, Department of House and Human Services

3.5 timeshigher

SUSTAINABLE GROWTH REQUIRES

SavingsWealthInvestment: Physical and Human CapitalRemittances?

0

5000000

10000000

15000000

20000000

25000000

Less than high school High school Some College College

MarriedSingle-parentCo-habiting

Average of NETWORTH

EDCL

MARRIED

Average Net Wealth Worth within the USA per Education Level

Sources: Aguirre (2007)

253%

333%

Average Net Wealth Worth in USA per Age Classification

Sources: Aguirre (2007)

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

Married Single-parents Co-habiting

<35

35-44

45-54

55-64

65-74

>75

Average of NETWORTH

Family Structure

AGECL

51%

40%

Average Net Wealth in Canada

per Family Structure

155%250%

Sources: Aguirre (2007)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Married Co-Habiting Single-Parent

Marital Status

Ca

na

dia

n D

oll

ars

Wealth

Housing263 %

200 %

0

50,000

100,000

150,000

200,000

250,000

Less HS HS Terciary College

Level of Education

Cana

dian

Dol

lars

Married

Not-Married 242%

Net Wealth in Canada

Sources: Aguirre (2007)

Percentage of Head of Households that Percentage of Head of Households that Report Owning Property and Report Owning Property and Holding Savings in GuatemalaHolding Savings in Guatemala

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Unions Married Separated Divorced Widowed

Own Home

Hold Savings

Source: ENEI (2004)

Level of Education of the Head of Household per Level of Education of the Head of Household per

Race and Family StructureRace and Family Structure in Guatemalain Guatemala

0

10

20

30

40

50

60

70

80

90

LAD INDIG LAD INDIG LAD INDIG LAD INDIG LAD INDIG LRACE INDIG

Unions Married Separated Divorce Widows Single Parents

Family Structure

Per

cent

age

of H

ouse

hold

s

No-education Grade School High School

Terciary College Graduate

Sources: ENEI (2004)

Children School Attendance by Children School Attendance by Family StructureFamily Structure in Guatemalain Guatemala

0

1000

2000

3000

4000

5000

6000

7000

8000

Unions Marriage Separated Divorce Widows

Family Structure

Head

Co

un

t

Indigenous

Ladino

Sources: ENEI (2004)

Net Wealth by Family Structurein Chile

Sources: INE (1997)

126 %

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Married Single Mother Cohabiting

Family Structure

Mill

ion

s o

f P

eso

s (1

997)

139%139%

160%160%

Wealth by Head of Household’s age and Wealth by Head of Household’s age and Family Structure in ChileFamily Structure in Chile

0

100,000

200,000

300,000

400,000

500,000

600,000

15-24 25-34 35-44 45-54 55-64 65 y mas

Mill

ions

of p

esos

(199

7)

MarriedSingle MotherCohabiting

Sources: INE (1997)

Education Level Achieved by Head of Education Level Achieved by Head of Household who Receive Remittances by Household who Receive Remittances by

Family StructureFamily Structure(% of Family Structure)(% of Family Structure)

School Attendance of Children (6-14) in School Attendance of Children (6-14) in Households who Receive Remittances by Households who Receive Remittances by

Family StructureFamily Structure(% of Family Structure)(% of Family Structure)

Ownership in Households who Receive Ownership in Households who Receive Remittances by Family StructureRemittances by Family Structure

(% of Family Structure)(% of Family Structure)

Guatemalan Children in Families Guatemalan Children in Families who Receive Remittanceswho Receive Remittances

Have a highest probability of attending Have a highest probability of attending grade school in married households grade school in married households (it (it increases by 58%)increases by 58%)

Have the lowest probability of attending Have the lowest probability of attending high school in non-married households high school in non-married households (it (it decreases by 89% for single mothers.)decreases by 89% for single mothers.)

If women is head of household and works If women is head of household and works the probability the probability decreases by 66%decreases by 66%..

ConclusionConclusion The family is a necessary good for economic

development: it should be promoted and protected if poverty reduction wants to be achieved.

Children develop in the best way within a family that is functional, i.e., with his biological parents in a stable marriage.

The breakdown of the family: damages the economy and the society since human, moral, and social capital is reduced and social costs increased.

Family structure is relevant for wealth. This happens to Family structure is relevant for wealth. This happens to be the case after other characteristics are controlled by.be the case after other characteristics are controlled by.

The impact of children on family wealth is best within The impact of children on family wealth is best within marriage.marriage.

Evidence seems to hold across countries. In socialized Evidence seems to hold across countries. In socialized market economies the negative impacts seem to be market economies the negative impacts seem to be mitigated but not eliminated.mitigated but not eliminated.

Healthy family structures support private property.Healthy family structures support private property.

Family dinners shows evidence of the importance of Family dinners shows evidence of the importance of families spending time together.families spending time together.