Life today is expensive, even in a household with two incomes, it can be hard to make ends meet. Especially if you have children, and the cost of childcare has only gotten more expensive. So what's the solution?
Gary Becker (1930 - 2014) was one of the most prolific and respected economists from the University of Chicago. In 1992, he was awarded the Nobel Prize for Economic Sciences “for having extended the domain of microeconomic analysis to a wide range of human behavior and interaction, including nonmarket behavior.”
In his 1981 book A Treatise on the Family, Becker analyzed the household as a sort of factory, producing goods and services such as meals, shelter, and child care. One of the interesting discoveries found was that, in order to maximize household output and wealth, once a family has kids, it’s generally better for one parent to stay home and run the household while the other parent with the higher income potential focuses 100% on work and maximizing their career.
A Homemaker Will Help To Optimize the Career Trajectory of the Breadwinning Spouse
When the members of a household specialize in their respective fields, they’re able to maximize the total output of their economic production. A breadwinner who doesn’t have to worry about housework can dedicate their focus on optimizing their career track. For example, a husband whose wife is a full-time homemaker can dedicate his focus completely on his work outside of the home. If their child falls ill, the breadwinner won’t have to worry about asking his employers for time off to stay home and care for the sick child.
This puts him at an advantage over his co-workers who have to juggle their work in the labor market alongside their family obligations outside of work. The same labor force advantage can be seen with other career obligations, such as the ability to go on last-minute business trips or staying late to work overtime. The breadwinner with the full-time homemaker is at an advantage because they need not worry about childcare responsibility at home.
And one of the often overlooked aspects of this benefit is how, since the household depends on one income, the breadwinner’s job will take precedence in the household’s decision-making paradigm. If a career opportunity arises for a higher income job or a promotion which will uproot the family to a different location, the decision is easy because it doesn’t involve the other spouse giving up their career track like it would in a two-income household.
Two-income households will often be stuck where they are because the opportunity cost is too high to pursue riskier but higher reward decisions.
What this means is, if a household has two breadwinners, the spouse with the promotion can’t just make the decision to take the promotion and uproot the family because they’ll have to take into account how this affects the other breadwinner’s career. Picture a husband who wants to accept a promotion at a different company in a different state, but he has to convince his wife to give up the career track she has established in her current company. The opportunity cost for his wife is high because she’ll have to start her career over by looking for a new job at the family’s new location.
Most of the time, these two-income households will be stuck where they are, not necessarily because of stagnation, but rather the opportunity cost is too high to pursue riskier but higher reward decisions. Imagine if you’ve built a career at a certain company, but your husband was offered a better paying job across the country. You would either have to tell him no, because you have plans for your own career, or you’d have to take off with him and start from scratch again at a different company.
This would not be a problem with a breadwinner-homemaker household since there’s almost zero career opportunity cost for the homemaker to move to a different location. The homemaker would easily bring the skills they’ve acquired (cooking, cleaning, educating, etc.) wherever the family unit is set up. Because of this, a homemaker can play an important role in supporting her (his) spouse in the spouse’s labor market employment.
A Homemaker Maximizes the Output of a Household’s Production
Speaking of household production, Becker compared families of dual-income households to one income households, and he found that the family with one stay-at-home caretaker will on average generate a higher productivity output in their household. Becker's analysis assumes that the gains to marriage are generated by specialization and the division of labor, implying that those with higher wages will tend to marry those with lower wages. If both spouses are working, however, then most of the gains to marriage may not arise from specialization and a division of labor between home and market.
Households with a partner who specializes in childrearing, while the other parent focuses on their career, tend to be more productive in the long run.
In simple English, it turns out that households with a homemaker who specializes in childrearing, while the other parent focuses completely on their career, tend to be more productive in the long run. There are many reasons for this, but one of them is because housework and child care are valuable economic outputs. If you paid someone else to do it, you’ll end up paying a premium for that service which will cost your household’s (family’s) wealth to diminish over the long run. (One family saved almost $17,000 a year when one parent chose to stay home full time.)
To simplify this even further, imagine a homemaker who had specialized her skills in preparing nutritious and delicious meals at home from scratch. For a family without a homemaker to enjoy the same quality of life, it would cost them a premium because they’d have to pay for takeout or dine out at a restaurant. And the homemaker would give the children an even more added advantage by passing down this knowledge to the offspring. For example, a child who is taught by the homemaker how to cook and clean will be at an economic advantage of their peers who’d have to pay for these services.
Yet, many women feel a lot of guilt and shame if they confess their desire to be homemakers once they have children. However, if external social pressures were lifted from the woman’s conscience, and she thinks about homemaking in the rational economic sense, she’d realize something her predecessors had always known — being a homemaker (housewife) has always made logical sense when a woman starts having children.
Certainly, there are women who would thrive better in the labor market, and these are women who tend to have jobs that they are highly skilled at performing. These highly paid professionals could handle the stress of juggling motherhood and their career because they could easily afford to outsource their childcare. But for the rest of us, the reality is that childcare is expensive. And it’s expensive because raising a child is valuable and important work. Which is why it’s a job that’s best performed by the child’s own mother.
In the wise words of Gary Becker, “A lot of barriers have been broken down. That's all for the good. It's much less clear what we see today is the result of such artificial barriers. Going home to take care of the kids when the man doesn't: Is that a waste of a woman's time? There's no evidence that it is.”
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