A Treatise on the Family. G. S. Becker. Cambridge, MA: Harvard University Press. 1981. Gary Becker is one of the most famous and influential economists of the second half of the 20th century, a fervent contributor to and expounder of the University of Chicago free-market philosophy, and winner of the 1992 Nobel Prize in economics. Although any book with the word "treatise" in its title is clearly intended to have an impact, one coming from someone as brilliant and controversial as Becker certainly had such a lofty goal. It has received many article-length reviews in several disciplines (Ben-Porath, 1982; Bergmann, 1995; Foster, 1993; Hannan, 1982), which is one measure of its scholarly importance, and yet its impact is, I think, less than it may have initially appeared, especially for scholars with substantive interests in the family. This book is, its title notwithstanding, more about economics and the economic approach to behavior than about the family. In the first sentence of the preface, Becker writes "In this book, I develop an economic or rational choice approach to the family." Lest anyone accuse him of focusing on traditional (i.e., material) economics topics, such as family income, poverty, and labor supply, he immediately emphasizes that those topics are not his focus. "My intent is more ambitious: to analyze marriage, births, divorce, division of labor in households, prestige, and other non-material behavior with the tools and framework developed for material behavior." Indeed, the book includes chapters on many of these issues. One chapter examines the principles of the efficient division of labor in households, three analyze marriage and divorce, three analyze various child-related issues (fertility and intergenerational mobility), and others focus on broader family issues, such as intrafamily resource allocation. His analysis is not, he believes, constrained by time or place. His intention is "to present a comprehensive analysis that is applicable, at least in part, to families in the past as well as the present, in primitive as well as modern societies, and in Eastern as well as Western cultures." His tone is profoundly conservative and utterly skeptical of any constructive role for government programs. There is a clear sense of how much better things were in the old days of a genderbased division of labor and low market-work rates for married women. Indeed, Becker is ready and able to show in Chapter 2 that such a state of affairs was efficient and induced not by market or societal discrimination (although he allows that it might exist) but by small underlying household productivity differences that arise primarily from what he refers to as "complementarities" between caring for young children while carrying another to term. Most family scholars would probably find that an unconvincingly simple explanation for a profound and complex phenomenon. What, then, is the salient contribution of Treatise on the Family? It is not literally the idea that economics could be applied to the nonmarket sector and to family life because Becker had already established that with considerable success and influence. At its core, microeconomics is simple, characterized by a belief in the importance of prices and markets, the role of self-interested or rational behavior, and, somewhat less centrally, the stability of preferences. It was Becker's singular and invaluable contribution to appreciate that the behaviors potentially amenable to the economic approach were not limited to phenomenon with explicit monetary prices and formal markets. Indeed, during the late 1950s and throughout the 1960s, he did undeniably important and pioneering work extending the domain of economics to such topics as labor market discrimination, fertility, crime, human capital, household production, and the allocation of time. Nor is Becker's contribution the detailed analyses themselves. Many of them are, frankly, odd, idiosyncratic, and off-putting. …

A Treatise on the Family

NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS by Richard H. Thaler and Cass R. Sunstein Penguin Books, 2009, 312 pp, ISBN 978-0-14-311526-7This book is best described formally as a general explanation of and advocacy for libertarian paternalism, a term coined by the authors in earlier publications. Informally, it is about how leaders, systems, organizations, and governments can nudge people to do the things the nudgers want and need done for the betterment of the nudgees, or of society. It is paternalism in the sense that "it is legitimate for choice architects to try to influence people's behavior in order to make their lives longer, healthier, and better", (p. 5) It is libertarian in that "people should be free to do what they like - and to opt out of undesirable arrangements if they want to do so", (p. 5) The built-in possibility of opting out or making a different choice preserves freedom of choice even though people's behavior has been influenced by the nature of the presentation of the information or by the structure of the decisionmaking system. I had never heard of libertarian paternalism before reading this book, and I now find it fascinating.Written for a general audience, this book contains mostly social and behavioral science theory and models, but there is considerable discussion of structure and process that has roots in mathematical and quantitative modeling. One of the main applications of this social system is economic choice in investing, selecting and purchasing products and services, systems of taxes, banking (mortgages, borrowing, savings), and retirement systems. Other quantitative social choice systems discussed include environmental effects, health care plans, gambling, and organ donations. Softer issues that are also subject to a nudge-based approach are marriage, education, eating, drinking, smoking, influence, spread of information, and politics. There is something in this book for everyone.The basis for this libertarian paternalism concept is in the social theory called "science of choice", the study of the design and implementation of influence systems on various kinds of people. The terms Econs and Humans, are used to refer to people with either considerable or little rational decision-making talent, respectively. The various libertarian paternalism concepts and systems presented are tested and compared in light of these two types of people. Two foundational issues that this book has in common with another book, Network of Echoes: Imitation, Innovation and Invisible Leaders, that was also reviewed for this issue of the Journal are that 1 ) there are two modes of thinking (or components of the brain) - an automatic (intuitive) process and a reflective (rational) process and 2) the need for conformity and the desire for imitation are powerful forces in human behavior. …

Nudge: Improving Decisions about Health, Wealth, and Happiness

25. Multiple Imputation for Nonresponse in Surveys. By D. B. Rubin. ISBN 0 471 08705 X. Wiley, Chichester, 1987. 258 pp. £30.25.

Multiple Imputation for Nonresponse in Surveys

We investigate conditions sufficient for identification of average treatment effects using instrumental variables. First we show that the existence of valid instruments is not sufficient to identify any meaningful average treatment effect. We then establish that the combination of an instrument and a condition on the relation between the instrument and the participation status is sufficient for identification of a local average treatment effect for those who can be induced to change their participation status by changing the value of the instrument. Finally we derive the probability limit of the standard IV estimator under these conditions. It is seen to be a weighted average of local average treatment effects.

Evolution and Rationality Some Recent Game-Theoretic Results. Identification and Estimation of Local Average Treatment Effects

Statistical Analysis with Missing Data

The Great Recession brought large increases in unemployment and college enrollment; we explore how changing labor market conditions affected the decision to enroll, focusing on the role of state-specific dimensions of Unemployment Insurance (UI) policy. We measure the enrollment response to changing economic conditions, comparing eighteen and nineteen year-olds with older individuals likely to have accumulated some labor market experience. We find that individuals in their mid to late-twenties are proportionally more responsive to cyclical variation in economic conditions, and we identify a substantial role of the UI program in determining post-secondary enrollment outcomes. States in which academic post-secondary programs unrelated to a specific occupation are allowable under UI have substantially magnified enrollment responses to local economic conditions. In addition, we provide some of the first evidence that the duration of UI affects a displaced individual’s propensity to enroll. These findings identify a substantial overlap between UI policy and post-secondary enrollment decisions, indicating the potential importance of UI in not only providing income but also facilitating investments in skills.

Out of Work and into School: Labor Market Policies and College Enrollment During the Great Recession

Analyses of college attainment typically focus on factors affecting enrollment demand, including the financial attractiveness of a college education and the availability of financial aid, while implicitly assuming that resources available per student on the supply side of the market are elastically supplied. The higher education market in the United States is dominated by public and non-profit production, and colleges and universities receive considerable subsidies from state, federal, and private sources. Because consumers pay only a fraction of the cost of production, changes in demand are unlikely to be accommodated fully by colleges and universities without commensurate increases in non-tuition revenue. For this reason, public investment in higher education plays a crucial role in determining the degrees produced and the supply of college-educated workers to the labor market. Using data covering the last half of the twentieth century, we find strong evidence that large cohorts within states have relatively low undergraduate degree attainment, reflecting less than perfect elasticity of supply in the higher education market. That large cohorts receive lower public subsidies per student in higher education explains this result, indicating that resources have large effects on degree production. Our results suggest that reduced resources per student following from rising cohort size and lower state expenditures are likely to have significant negative effects on the supply of college-educated workers entering the labor market.

Cohort Crowding: How Resources Affect Collegiate Attainment

Time to completion of the baccalaureate degree has increased markedly in the United States over the last three decades, even as the wage premium for college graduates has continued to rise. Using data from the National Longitudinal Survey of the High School Class of 1972 and the National Educational Longitudinal Study of 1988, we show that the increase in time to degree is localized among those who begin their postsecondary education at public colleges outside the most selective universities. In addition, we find evidence that the increases in time to degree were more marked amongst low income students. We consider several potential explanations for these trends. First, we find no evidence that changes in the college preparedness or the demographic composition of degree recipients can account for the observed increases. Instead, our results suggest that declines in collegiate resources in the less-selective public sector increased time to degree. Furthermore, we present evidence of increased hours of employment among students, which is consistent with students working more to meet rising college costs and likely increases time to degree by crowding out time spent on academic pursuits.

Increasing Time to Baccalaureate Degree in the United States

After rising steadily between 1954 and 1968, the percentage of all bachelor's degrees awarded in the arts and sciences declined dramatically. These swings cannot be explained by demographic variables; however, they have been affected by changes in the academic profiles of educational institutions that were in turn related to trends in enrollment. Even more important have been the changing choices of fields of study made by men and women (particularly in the case of the humanities), in part as a consequence of widening opportunities for women. The flight from the arts and sciences now appears to be over, and in the future gender-related variables can be expected to have less impact on the distribution of degrees conferred.

The flight from the arts and sciences: trends in degrees conferred.

Ask any high school student in a well-heeled suburban community around the United States the best strategy for applying to college, and chances are you'll hear something like this: apply to several schools, most with students whose grades and test scores are similar to your own. But be sure to include one or two "safeties" at which admission is all but guaranteed and a couple of "reaches." And data on the colleges to which high-achieving, high-income students apply and that they attend suggest that they are paying attention. The situation for low-income students appears to be quite different. The vast majority of even very high achieving students from low-income families do not apply to a single selective college or university. In other words, having worked hard in high school to prepare themselves well for college, they do not even apply to the colleges whose curriculum is most geared toward students with their level of preparation. This is particularly puzzling because there are good reasons why many of these students should attend more-selective colleges. First, they are likely to succeed if they do. The high-achieving, low-income students who do apply are admitted, enroll, progress, and graduate at the same rates as high-income students with equivalent test scores and grades. Second, taking into account financial aid, low-income students generally face lower net costs at selective institutions than at the far less-selective institutions with fewer resources that most of them attend (see Figure 1). [FIGURE 1 OMITTED] One potential explanation for this pattern of behavior is that high-achieving, low-income students do not have access to good information about college quality and costs. These students are quite dispersed throughout the country and are often the only high-achieving student or one of just a few such students in their school. Thus, their high school counselor is unlikely to have much expertise regarding selective colleges and likely to be focused on other issues. Nor are recruiting visits to their high school or community likely to be cost-effective for college admissions staff. Moreover, it is often the case that neither parents nor other trusted adults are able to fill the deficit in information about college quality and costs for high-achieving low-income students. In short, traditional information channels may bypasss, low-income students, even if counselors and admissions staff conscientiously do everything that they can for these students. Many low-income students may therefore be poorly informed about their college opportunities or deterred by apparently small barriers such as the paperwork required to request a waiver for application fees. Although a great deal of relevant information is available on the Internet, it is not easy for an inexperienced student to distinguish reliable sources of information on college admission standards, curricula, and net costs from the numerous unreliable (sometimes egregiously misleading) sources that are also online. Furthermore, many available information sources assume that low-income students are low-achieving and offer guidance that reflects this assumption. Because high-achieving, low-income students are atypical, these materials, aimed at students who are at the margin of attending any college, will provide little assistance. For this study, we designed an experiment to test whether some high-achieving, low-income students would change their behavior if they knew more about colleges and, more importantly, whether we can construct a cost-effective way to help such students realize their full array of college opportunities. We do so by randomly assigning interventions that provide different types of information to roughly 18,000 students, including 3,000 students who serve as controls. The most comprehensive form of the intervention, which we call the Expanding College Opportunities-Comprehensive (ECO-C) Intervention, combined application guidance, semicustomized information about the net cost of attending different colleges, and no-paperwork application fee waivers. …

Sarah Turner

Papers

Out of Work and into School: Labor Market Policies and College Enrollment During the Great Recession

Cohort Crowding: How Resources Affect Collegiate Attainment

Increasing Time to Baccalaureate Degree in the United States

The flight from the arts and sciences: trends in degrees conferred.

Expanding College Opportunities: Intervention Yields Strong Returns for Low-Income High-Achievers