Markets network member Matthias Doepke recently spoke to HCEO about his work on family economics. "In the past family economics and macroeconomics were separate fields. In my research I try to bring them closer together," he said. "Family economics just says that we want to apply the same idea that drives economics overall, namely that incentives drive human behavior, to family decision-making."
One of Doepke's recent areas of interest is studying how fertility choices affect population growth. It is a research area he explored in a recent HCEO working paper, "Bargaining Over Babies," co-authored with Markets network member Fabian Kindermann. "Why is it that fertility rates are currently so low in many developed countries," Doepke asks. In the paper, the authors put forth a bargaining model to account for fertility disagreements between couples. "What we find is that in the countries where it is the women who disagree with having more children, women do the vast majority of childcare." The countries where many women disagree with having more children also have very low fertility rates.
Doepke notes that incentives matter in studying family economics, including tackling issues of inequality. "Human capital decisions start in the family," he says. Parenting styles have changed drastically in recent decades, as the stakes in raising children have become higher. "What matters for parenting is how high the stakes are in what you do as a parent early on," he says. "Inequality has gone up, returns to education have gone up...The stakes have risen a lot. We now see that the gap in economic outcomes between people who go to college and who only finish high school has grown much wider." Doepke’s research on this issue is summarized in the HCEO working paper “Parenting with Style: Altruism and Paternalism in Intergenerational Preference Transmission” (with co-author Fabrizio Zilibotti).
Family economics has grown a lot as a field since Gary Becker began studying its importance, Doepke says. "Nowadays we understand that the family plays an essential role for many of the things we really care about in economics," he says.
Doepke is a Professor of Economics at Northwestern University, an NBER Research Associate, and a CEPR Research Fellow. He received his Ph.D. from the University of Chicago.