1. Family and Economic Development: Harvesting the Seed of Economic Growth
Dr. Maria Sophia Aguirre
Department of Business and Economics
The Catholic University of America
IV Congreso Internacional de la Familia
Universidad de la Sabana
Bogotá, Colombia
April 25-26, 2008

2. Is the Family Relevant for Economic Development?
Some would argue that the family is key because:
The earth is limited
The family is a hostile place for women and children
Large families threaten countries’ stability
Others argue that the family is key because:
Healthy families are needed for the economy to fulfill its purpose. Therefore it is a reference point for policy
Growth of the population does not equal poverty
The aging population “trap” threatens sustainable economic growth and development
The earth is limited -- the more we are, the poorer we will be.
The family is a hostile place for woman and children. Therefore it has to be monitored and regulated by international laws and institutions if poverty among women is to be eradicated.
Population threatens government stability in developing countries
Others argue that the family is key because:
Healthy families are needed for the economy to fulfill its purpose: Cover basic needs, generate profits, and contribute towards the wellbeing of people
Numbers in themselves do not equal poverty; rather, poorly structured families and societies as well as economies foster poverty.

3. How Does the Family Fit in the Economy?
Basic Activities
Means Used
Role of the Family
Purpose
Production
Resources
Human Capital
Basic Needs
Exchange
Market
Human, Moral, Social Capital
Profit
Consumption
Optimization and Distribution
Appropriate distribution
Wellbeing
(welfare)

4. We know from economic analysis that in economic development
There is a positive correlation between
human capital, infrastructure and economic growth
healthy institutions and economic development
health and income per capita
These positive correlations reflect an essential causal link running from human capital to
healthy institutions (social capital)
infrastructure and technology
Life expectancy is a significant predictor of economic growth

5. Life Expectancy at Birth
29.8 years
Source: Human Development Report, 2007, Table 1

6. Socioeconomic Relevance
Children develop best within a family that is functional, i.e., with their biological parents in a stable marriage
Marriage Increases likelihood of father having good relations with children.
Marriage reduces the probability of children divorcing themselves or becoming unwed parents.
The academic and social performance of a child is very closely related to the structure of the family in which he lives and this is important for the quality of human and social capital
Divorce reduces the likelihood of children graduating from college and high school.
Divorce increases risk of course failure.

7. The psychological stability and health of a child is closely related to healthy families and this is important for worker productivity and government finances
Children enjoy better physical health, on average, than other family forms.
Sharply reduces infant mortality.
Increases life expectancy, especially for men
Associated with reduce abuse of alcohol, and substance abuse for adults and teens.
Associated with better health and lower probability of injuries for both men and women.
Lower levels of physiological distress and mental illness.
Mothers have lower levels of depression than single or co-habiting mothers.

8. Family Relationships and Its Relation to the Frequency of Family Dining (% of Teens)
40%
40%
171%
Source: National Center on Addiction and Substance Abuse, Columbia University.

9. Academic Performance and Its Relation to the Frequency of Family Dining (% of Teens Obtaining Mostly A or B Grades in School)
38%
Source: National Center on Addiction and Substance Abuse, Columbia University.

10. Substance Abuse and Its Relation to the Frequency of Family Dining (% of Teens Who Have Tried Abuse Substances)
73%
169%
142%
191%
Source:National Center on Addiction and Substance Abuse, Columbia University.

11. Quality of Family Dining and Its Relation to their Frequency (% of Teens)
1.3
2.5
3.1
Source: National Center on Addiction and Substance Abuse, Columbia University.

12. Percentage of Children Whose Families have Family Dining by Family Structure (% of children)
3.5 times
higher
Source: Administration for Children and Families, Department of House and Human Services

13. 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

14. Percentage of Families that are in Poverty by Family Structure and Ethnicity, 2006
Source: Annual Demographic Survey, Poverty in the U.S.: US Census Bureau, August 2007, Table POVO2.

15. Percentage of Women who are in Poverty by Family Structure and Ethnicity, 2006
Source: Annual Demographic Survey, Poverty in the U.S.: US Census Bureau, August 2007, Table POVO3.

16. Percentage of Children who are in Poverty by Family Structure and Ethnicity, 2006
Source: Annual Demographic Survey, Poverty in the U.S.: US Census Bureau, August 2007, Table POV21.

17. Developed Countries Welfare Expenditures vs
Developed Countries Welfare Expenditures vs. Developing Countries Debt in 2007
Taiwan population is 22.5 million. Debt in China is $149.4 billion.
Source: CIA World Handbook, 2008

18. The family faces serious health and poverty problems, especially in the developing world
Lack of income and assets to attain basic needs:
Human assets
Natural assets
Physical assets
Financial assets
Social assets
Aging security
Vulnerability to adverse shocks are linked to an inability to cope with them
Human Assets: basic labor, education, health, skills
Natural assets: inputs of production
Physical access: infrastructure
Financial assets: access to savings and credit
Social assets: institutions that are functional and not corrupted
Aging Security: lack of a social security system

19. Environmental Health, Welfare and Living Conditions in Low Income vs Developed Countries
Indicator
% access
House Connection: water
48 / 99
House Connection: sewerage
46 / 99
House Connection: electricity
62 / 100
Access to Improve Water Sources
61 / 100
Access to Sanitation
43 / 100
Solid waste disposal: landfill or incinerated
31 / 78
Solid waste disposal: other (dump,recycled,etc.)
66 / 22
Paved Road
19 / 94
Literacy
53.6 / 100
Under-five mortality (per 1000)
153 / 6
Public Expenditures on Health (%GDP)
1.5/ 6.2
Sources: World Bank, UN, 2006

20. Causes of Death in Women and Men, 2005
5 million new cases per year
8 million new cases per year
million new cases per year
WHO, World Health Report, 2007 , Projected deaths by region, sex and cause for 2005, 2015, 2030.

21. One-Year-Olds Fully Immunized
20% Decrease Tuberculosis Immunizations
33% Decrease Measles Immunizations
Source: Human Development Report, 2007, Table 6

22. Infant Mortality Rates
95.9% Decrease
Number per 1,000 Live Births
Source: Human Development Report, 2007; Table 10

23. Low Cost Effective Interventions Cost of Treatment and (annual cost per capita)
US Dollars
Treatment
Costs
Effectiveness
Chemotherapy for TB (6 months )
$20.00
($0.60)
95%
Contraceptives (HIV)
$14.00 ($1.90)
99%
(85%-95%)
Hydration salts for Diarrhea
$0.33
($1.60)
Pneumonia Antibiotics (5 days antibiotics)
$0.27
High
Measles (1 dose of vaccine)
$0.26
($0.50)
98%
Malaria
Pills / Nets
$1 / $0.5
($0.05/$4.5)
100%
Sources: CDS, WHO

24. Cost of malaria to African countries is 1
Cost of malaria to African countries is 1.3% of GDP per year, productivity of the worker is reduced by 60%. Direct and indirect costs of malaria in sub-Saharan Africa in term of overall GDP is equivalent to a loss of $100 billion annually.
75% of TB infections and deaths occur in the year age group (the most productive group). 20%-30% of Income is lost due to TB.
AIDS places seventh among the leading causes of death. The main mode of transmission are homosexual and heterosexual promiscuity and injected-drug-use (IDU) (all high risk behavior).
Majority of maternal deaths are due to poor access to health care (1.9% of female death)
Africa Malaria Report 2003, WHO
Sources: Scaling Up the Response to infectious Diseases, 2002 and RBM 38, WHO, 2005

25. Solutions often Proposed
Outlined in the 8 UN Millennium Development Goals.
Population control
Aging population trap
“Safe sex” and antiretroviral drugs.
Condoms are not the answer to HIV and increases the risk of contracting AIDS
(British Medical Journal (2008), Chin (2007)
Not a solution for IUD and Heterosexual transmission
Access to family planning increases sexual promiscuity (Kaiser 2000, Paton 2002, USAID 2002)
Reduction for women is not as high as for men (85%) because of physical differences and because they are the recipient during the sexual intercourse.
In a 1996 study conducted in four countries, the Conjunct Program of the United Nations on HIV/AIDS found that the use of condoms increased the risk of contracting AIDS because most contraceptives use a chemical substance, nonoxinol-9, which tends to have an irritating effect that causes lesions increasing the risk of contracting HIV. (UNAIDS 1996 and NACHHD 1999)
Eugenics is the key to the production of healthy offspring. At present premarital blood tests and newborn baby health check-ups are offered to the public in order to improve the genetic stock.
Neither solution address the real problems

26. The Population Control Argument
First: rapid growth in population means the spread of poverty and aggravates conditions such as as poor health, malnutrition, illiteracy, and unemployment (Bucharest, 1974)
Second: population threatens government stability in developing countries, and encourages confrontation between developed and developing countries (Memorandum 200)
Third: it pushes future generations to scarcity, and an unsustainable environment carrying capacity (Rio, 1992)
Fourth: it sees population growth to be symptomatic of the larger problem of women's oppression—the more children a woman has, the less opportunity she has for her own self-actualization and development (Cairo, 1994 and Beijing, 1995)

27. Aging Trap
Social security system funding: the family cannot support the elderly
Competition between the younger and older people
Early retirement
To provide for the economic needs of the elderly, there is a reduction of funding allocated to training new generations
The transmission of cultural, scientific, technical, artistic, moral, and religious goods is endangered: "moroseness” results. Add to this immigration.
Saving rates are affected by a society's age structure, mirroring the change in an individual's saving rate over the life cycle.

28. Speed of Population Aging
Number of years for % of population aged 65 and over to rise from 7% to 14%
Source: US Census Bureau, 2000

29. Allocation of Funds
World Bank budgeted for $500 to combat malaria and for tuberculosis amounted to $560 million.
The WHO funds totaled $309 million in for malaria and tuberculosis.
For HIV/AIDS, the World Bank allocated $1.8 billion in grants, loans, and credits to fight HIV/AIDS
Cost of Antiretroviral regimen has decreased significantly ($12,000 per year to $100)
Annual population assistance levels reached $2 billion a year.
The misuse of funds does not only affect health but also other fundamental elements of economic growth

30. Expenditure on Grant-Financed Development Activities
of the United Nations System by Sector
(Percentage of Total)

31. Expenditures on Grant-Financed Development Activities of the United Nations System by Sector
Source: Compiled from Comprehensive Statistical Data on Operational Activities for Development,
years

32. SUSTAINABLE GROWTH REQUIRES
Savings
Wealth
Investment: Physical and Human Capital

37. Percentage of Head of Households that Report Owning Property and Holding Savings
Source: ENEI (2004)

38. Level of Education of the Head of Household per Race and Family Structure
Sources: ENEI (2004)

39. Children School Attendance by Family Structure
Sources: ENEI (2004)

40. How Government Policies Can Help:
Some Examples
Legislation that supports families vis a vis other types of living styles
Programs that support and promote healthy marriages and stable families
Changes in family subsidies/penalties for children
Parental leaves, work structure
Promotion and protection of the family as a means to eradicate poverty, especially the feminization of poverty
Programs directed towards fostering functional societies and markets, where corruption is not a fundamental part of governmental operations.

41. Education Transfer all government aid throughout voucher system
Differentiate voucher, targeting more resources to the most needed (with higher cost of education)
Spread out info about the key role of family within society and effect on educational outcomes
Enhance parents’ owes and rights to educate their children (e.g areas such as sexual education)
Allow parents (and or teachers) to get engage in municipal school management

42. Competitive Funds
Prevent domestic violence and enhance health family relationships
Sexual education programs designed and chosen at school level by parents and teachers
Pre-marriage orientation
Support programs for couple in crisis
Programs aim to prevent alcoholism and drug abuse

43. Conclusion
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.

44. The Neo-Malthusian approach is seriously flawed on many levels and policy actions based on such assumptions are inefficient and damage real sustainable development. They lead to:
Aging trap: one child policy
Weakening of the family
Health problems
Financial burden for government
Some of the recent reevaluations of family policies in developed countries seem to point in the right direction.

45. Family structure is relevant for wealth
Family structure is relevant for wealth. This happens to be the case after other characteristics are controlled by.
The impact of children on family wealth is best within marriage.
Evidence seems to hold across countries. In socialized market economies the negative impacts seem to be mitigated but not eliminated.
Life-cycle theory of savings seems to be supported by empirical evidence.
Healthy family structures support private property.