Family Economics

Course Description

The purpose of this course is to examine the role of the household (family) in structuring the economic environment. We will learn different theories explaining the interrelation between households’ choices and the macroeconomy.

On the one hand, households optimally choose the number of children they wish to have, which determines the age structure of the population. They choose the level of eduction of each child. This actually forms the skills of future labor force and its productivity. Moreover, the optimal decisions on leisure, consumption and investment in children are taken concurrently with the choices of current labor supply for both genders. On the other hand, the above described choices taken by households are not isolated from the macroeconomic environment. While wage of women relative to men may affect female and male labor supply, the returns to education relative to child’s future income may affect the number of children and their level of education.

How these decisions are taken? Does a husband and wife who form a household have the same utility function? If not, then how couples decide upon their optimal choices. In most of the course we will adopt the unitary household framework but will also discuss other non-unitary frameworks such like Cooperative (collective) or Non-cooperative (strategic).