Economies of Care

Nancy FolbreDepartment of Economics

University of Massachusetts Amherst

This is the powerpoint presentation made at the GNET conferenceat City University in London on March 27, minus the graphics.Feel free to contact me for additional info at folbre@econs.umass.edu

Economies of care—as in, more than one…..

Economies of care in the familyand the community coexist and co-evolve with economies of care in the market and the state.

Yet these economies are sometimes at odds—how can we find the right balance between them?

Double Meanings

Like “economies of scale,” “economies of care” can improve the relationshipbetween 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 aface-to-face orhands-on or first-name relationship that implies some emotional connection and concern for that person’s well being.

Direct care work can be paid or unpaid, market or non-market, male or female.

Recipients often dependents—but sometimes also healthy adults.

Intrinsic versus extrinsic motivation:not a dichotomy, but a continuum.

Primarilyseekingpecuniaryreward

Reciprocity ormutualobligation

Motivated primarily byaffection andconcern

Certain of ownimpersonal needs

conventional market transactions

some informal tradeand barter

some charity,

volunteer work

e.g. food bank

Uncertain of own needs(infoproblems)

some market transactionsin health and education

some informal trade, barter

some paid

care of dependents

Needs personal connection (emo/warm glow)

some market transactions inhealth 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 quality—long-term commitments and reduced need for monitoring;“incentive-enhancing preferences”

Low cost—resulting 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 didn’t expect this and I didn’t want it, but my heart’s involved now.”

(A grandmother, describing her care for her grandson.)

“I love them. That’s all, you can’t 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 you’ll find meToo weak to break the chains that bind me,

I need no shackles to remind me,I’m 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 womenworking for pay.

Encourages occupational segregation and “pay penalty” in jobs that require nurturance

Coordination Problem

Specialization in caregiving is addictive and costly. Difficult to establishproperty rights over children or other public goods created by care. Bargainsnot enforceable;

Caregivers can anticipate and seek to reduce their vulnerability.

“Defamilialization”

Increases in women’s labor force participation have been associated with adecline in time devoted to family care.

Many women have moved into paid provision of care—teaching, nursing, childcare and elder care.

Movement away from intrinsic toward more extrinsic motivation.

Family care still quite important—what is likely to happen to it in the future?

“Marketization”

Good Bad

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 toforce women to “overspecialize” in care.

Capitalism Slowly Weakens Patriarchy…

Wage employment isbased on individual market work, notfamily work

Both wage employment and fertilitydecline empower women.

Women engage incollectivepolitical action.

but Remains Dependent on It…

Caring for dependents cannotbe completely shifted to the market.

“Family wage” rules reinforcetraditional gender norms and encourage breadwinner/homemaker family.

The “welfare state” socializes at leastsome of the costs of caring for dependents.

The nation-state takes on many of theresponsibilities 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 don’t 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 preventfree-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 unionizationReconceptualize 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 dollarvalue of parental expenditures onchildren in the U.S. (including the value of time)and compares these with the value ofpublic expenditures.. .

It also emphasizes the need forbetter intergenerationalaccounting.

Much of this material is or will be posted on my blogAt http://blogs.umass/edu/folbrePlease check it out and post comments….I am also soliciting “guest posts”