Economies of Care Nancy Folbre Department of Economics University of Massachusetts Amherst This is the powerpoint presentation made at the GNET conference at City University in London on March 27, minus the graphics. Feel free to contact me for additional info at

Economies of care as in, more than one….. Economies of care in the family and the community coexist and co- evolve with economies of care in the market and the state. Yet these economies are sometimes at oddshow can we find the right balance between them? Double Meanings

Like economies of scale, economies of care can improve the relationship between inputs and outputs in the production of services such as child care, elder care, and education. How can we use them to promote efficiency in the production of human capabilities?

The American Heritage Dictionary gives two definitions of the verb that seem positive. 1. To be concerned or interested. 2. To provide needed assistance or watchful supervision. But as a noun, the definitions are rather negative: 1. A burdened state of mind, as that arising from heavy responsibilities; worry. 2. Mental suffering; grief. To be concerned or interested, it seems, is to assume a burden. What is Care?

Care Work Defined Direct care work involves provision of services to another person in a face-to-face or hands-on or first-name relationship that implies some emotional connection and concern for that persons well being. Direct care work can be paid or unpaid, market or non-market, male or female. Recipients often dependentsbut sometimes also healthy adults. Intrinsic versus extrinsic motivation: not a dichotomy, but a continuum.

Primarily seeking pecuniary reward Reciprocity or mutual obligation Motivated primarily by affection and concern Certain of own impersonal needs conventional market transactions some informal trade and barter some charity, volunteer work e.g. food bank Uncertain of own needs (info problems) some market transactions in health and education some informal trade, barter some paid care of dependents Needs personal connection (emo/warm glow) some market transactions in health and education friendships and intimate relationships among adults paid and unpaid care of dependents Worker Motivation Consumers

Non-Neoclassical Aspects limited consumer sovereignty (information problems, agency problems, monitoring problems) social preferences (altruism and obligation) endogenous preferences (emotional stickiness, cultural construction) coordination problems externalities

Care Promises Quality We care more. TM We care about you completely. TM We care. TM All these phrases have been trademarked:

Intrinsically Motivated Care: Benefits for Consumers a.k.a. children, elderly, patients, students… General: High qualitylong-term commitments and reduced need for monitoring; incentive-enhancing preferences Low costresulting from compensating differentials Specific: In short run, inelastic response to risk of poverty, stress, pay reduction, speed-up, deterioration in working conditions, or reduction in payoff

Prisoners of Love I didnt expect this and I didnt want it, but my hearts involved now. (A grandmother, describing her care for her grandson.) I love them. Thats all, you cant help it. (Paid caregivers, describing their feelings toward many of their clients.) The results rather more complicated than a compensating differential. Alone from night to night youll find me Too weak to break the chains that bind me, I need no shackles to remind me, Im just a prisoner of love lyrics by Leo Robin, 1931

Liabilities for Workers (primarily women) General: Costly preferences, reduced bargaining power (hold-up) Specific: Increases likelihood of paternal abandonment and patriarchal control. Contributes to double-day for women working for pay. Encourages occupational segregation and pay penalty in jobs that require nurturance

Coordination Problem Specialization in caregiving is addictive and costly. Difficult to establish property rights over children or other public goods created by care. Bargains not enforceable; Caregivers can anticipate and seek to reduce their vulnerability.

Defamilialization Increases in womens labor force participation have been associated with a decline in time devoted to family care. Many women have moved into paid provision of care teaching, nursing, child care and elder care. Movement away from intrinsic toward more extrinsic motivation. Family care still quite importantwhat is likely to happen to it in the future? Marketization

GoodBad Efficiency (conventionally defined) choice and competition; economies of scale; performance-based rewards limited substitutability; reduced quality; dependents lack consumer sovereignty; monitoring problems Norms and Preferences more gender flexibility; shift from quantity to quality of children reduced supply of caring labor; more vulnerability for dependents Externalities fertility decline; greater gender equality below-replacement fertility greater class/race inequality Economic Implications of Defamilialization

Origins of Patriarchal Systems Patriarchal systems use physical force, property rights, and cultural norms to force women to overspecialize in care.

Capitalism Slowly Weakens Patriarchy… Wage employment is based on individual market work, not family work Both wage employment and fertility decline empower women. Women engage in collective political action.

but Remains Dependent on It… Caring for dependents cannot be completely shifted to the market. Family wage rules reinforce traditional gender norms and encourage breadwinner/homemaker family. The welfare state socializes at least some of the costs of caring for dependents. The nation-state takes on many of the responsibilities of the family: education, old-age security, and most recently, explicit subsidies for parents.

Capitalism Represents Itself as Masculine

And the Nanny State as Feminine Capitalism liberates caregivers but penalizes care. Women are offered an unpleasant choice: either take on disproportionate responsibilities for care, or dont commit to caring relationships. Meanwhile, competition among countries (and regions), as well as firms, create pressures to lower the cost of care. Welfare states are described as soft, weak, and uncompetitive.

Family Policy: A Neoliberal Dilemma Capitalist institutions need families but would prefer not to pay for them. Coordination problem: how to prevent free-riding? Note analogy with natural environment: e.g. capitalism needs a stable climate, but would prefer not to pay for that either. International competition Intensifies pressure to offload or externalize costs to non-market sectors.

Policy Agenda Promote work/family/community balance… Improve measures of economic outcomes… Improve institutional design… Modify gender roles… Build links among care sector workers Emphasize the common interests of care providers and care recipients Challenge the claims that care should not pay Promote unionization Reconceptualize the role of the public sector; Publicize and encourage best practices management.

Research Agenda 1.What is care? 2.How do we measure it? 3. What determines its supply? 4. Why are caregivers economically vulnerable? 5. Why is care provision so gendered? Five questions that have received considerable attention: (Questions not listed in order of priority! )

6. How does care affect living standards? 7. What is optimal level of personal connection and emotional attachment in care provision? 8. What is impact of globalization and increased immigration on economies of care?. 9. What is the relationship between care and social capital? 10.How can be better understand and design intergenerational transfers? Five questions that need more attention:

My new book estimates the dollar value of parental expenditures on children in the U.S. (including the value of time) and compares these with the value of public expenditures... It also emphasizes the need for better intergenerational accounting.

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