Your Lying Eyes

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10 December 2008

Effect on Families of a Slowing Economy

I've been writing recently on the slower rate of growth we've experienced in the U.S. since the 60's compared to the post-war period, and in particular the 60's themselves. For example, here I pointed out that had we grown our economy at a pace equal to what we managed in the 60's, we'd be 67% richer today - so a person earning $100k today would have the purchasing power of a $167k salary. Even with a modest 3.5% growth rate it would be equivalent to $122k. Instead, since 1970 we've had average annual growth of less than 3%. All this data is available on the website.

Yet achieving even that modest growth has exacted a substantial social price. Our workforce has swelled since then from 57% of the adult population to 64%, obviously from more women working today than 40 years ago. But what has been the effect on the family? i decided to take a look at the General Social Survey to see if we can answer that question (and to answer Razib's challenge to bloggers to use the GSS to "take 10 minutes out of their day to double-check their intuitions").

Unfortunately, this exercise took me a helluva lot longer than 10 minutes, but more on that later. What I wanted to find out was whether moms are working a lot more than they used to. Seems obvious that they are, but are there facts to back it up? I decided to look at married women between the ages 25 and 45 with 1-3 children over time. Here's what I found:

As you can see, in 1972 (the first year of the GSS), 65% of moms were of the stay-at-home variety, and barely over 20% of them worked full time. These figures would dramatically reverse over the next 15 years. Since 1987, full-time working moms seem to have peaked at around 50% while homemakers have bottomed in the 20-30% range. There's an odd sudden change in direction in the 2006 survey which could be just an aberration - we'll have to wait for the latest survey to find out what that is.

Again, what is striking is that our economy's growth is actually slower despite this injection of more workers into the production stream. Looking at the graphs, it's almost a straight line from 1972 to 1987, implying that these could have continued to more extreme levels back to the 60's. The least squares estimate for 1966 has 12% of mothers working full time and 78% staying home - although it could also have leveled off at the 1972 level - we can't really tell. So it would be one thing if young mothers are working so that we can all be richer, but instead we're taking mothers away from their children and seeing little for it (except presumably even worse economic performance).

But what about the other view that these women are being liberated from a suffocating home life to pursue an independent career? This issue came up in Peter Schiff's now notorious 2006 evisceration of Art Laffer on CNBC where he points out that women are now forced to work while years ago they could stay home with the kids. Both he female moderator and Laffer chided him claiming "many women like to work" to which Schiff responded "I'm sure you enjoy your job" (about 6:35 in).

To address this I tried to find data that would suggest women are indeed being forced by circumstance to work. What I did was look at workforce participation for this same cohort (married, 1-3 kids, age 25-45) by husband's income, just for 2006 (because the GSS income variables don't seem to compare well across multiple periods), the idea being that if women are working involuntarily there should be a fall-off in employment the more money hubby brings home. I grouped the incomes into three groupings to get N's per income cohort close to 100 (total respondents in this group was 292). Here's what I found:

So, based on this data, Peter Schiff may be right (as he was with just about everything else in that exchange) - there is a tendency for women not to work when her husband is making enough money to support the family, and thus the high level of working moms may be largely involuntary.

GSS Notes. The GSS respondent could be male or female, so I ran two different queries: one getting spouse's working status where respondent is male, and the other getting respondent's working status when respondent is female. I then combined the data externally in a spreadsheet. I wanted to get ages 25-45 only for the wife, but there's no spouse age(!) - at least not that I could find, so I had to settle for husband ages when respondent = male. But there didn't seem to be substantially different results for male vs. female respondents. Variables used: Filters - SEX(1 or 2), MARITAL(1), AGE(25-45),CHILDS(1-3); columns: SPWRKSTA (when SEX(1)), WRKSTAT (when SEX(2); Row: YEAR.

For the income chart, GSS also does not have spouse's income, so I used only those cases where respondent was the husband. Also, there's a 2006 income variable (RINCOM06) but nothing for 2004 or 2002. The generic income variable is way to restrictive, so I was kind of forced to use a small set of responses. I also couldn't figure out a way to group the income brackets together within the GSS app, so again I got back the data in a table and worked on it in Open Office Calc. Variables used: SEX(1), MARITAL(1), AGE(25-45),CHILDS(1-3), YEAR(2006); column: SPWRKSTA; Row: RINCOM06.

I had a number of false starts and iterations to get the results back that I had intended, plus some playing around. Just the raw time spent working with GSS was probably close to an hour, plus the time writing this post - about 3 hours wall time. I hope it makes sense.


Blogger Steve Sailer said...

Nothing can be done right in just ten minutes.

December 11, 2008 9:57 PM  
Blogger Steve Sailer said...

What's remarkable today is how women are both supposed to work and supposed to act as a full time mom. For example, when I was a kid in the 1960s and it was time for my baseball game at the park, my homemaker mother would say, "Have a nice game, honey," and I'd take my glove and walk to the park and then walk home when it was over. Both of my parents refused to go to any of my games on the grounds that it would put too much pressure on me. And that was fine with me because I mostly struck out and dropped flyballs.

Today, both mom and dad are supposed to load up the SUV with the kid's duffel bag full of baseball impedientia (weighted warm-up donut, carbon fiber bat, and so forth), then drive to the park, then watch every inning of the kid's game, ideally videotaping for home study. If one parent arrives midway through the game, the other couples look down upon that couple for insufficient parental love, and assume that the poor child will grow up to spend years in therapy complaining about how his parents didn't watch every inning.

December 11, 2008 10:07 PM  
Blogger ziel said...

Boy is that ever true. I thought those few parents who went to every game where absolute whack jobs. Never mind these people who drive all over the state all weekend for their kids' tournament leagues.

December 12, 2008 1:18 AM  
Anonymous Dano said...

That clip with Peter Schiff is fascinating.

He should be Treasury secretary.

December 13, 2008 10:08 AM  
Blogger ziel said...

The only thing Schiff didn't call right was not anticipating the whole world throwing their money into T-Bills instead of gold. But that could be just another big shoe that will eventually drop.

December 13, 2008 10:42 AM  
Blogger ziel said...

Actually, the other big thing Schiff got wrong is that one should invest in foreign companies. The problem is there is no such thing as a 'global economy'. There's all these nations or regions out there all with their own little (or big) economies. Then there's trade with the U.S. - that's the so-called 'global economy.' Take that away, and suddenly there's no growth anywhere.

Also, Schiff's business is foreign investment, so it's hard to tell whether he's just talking sense or talking up his own business - not that he can't be doing both, but who can tell?

December 13, 2008 1:54 PM  
Anonymous Ed said...

One thing that has occurred to me recently is that I can't afford to get married unless my wife works (I earn almost exactly the median household income, but in a city with high costs of living). Without being particularly poor, I'm effectively priced out of a traditional marriage when one spouse works. As it happens, I don't particularly want a traditional marriage, but fifty years ago it would have been regarded as a social catastrophe if middle class men couldn't afford to support their wives.

Same with children, if I had children I couldn't afford to send them to college without either myself or the kids taking on large amounts of debt.

December 14, 2008 4:50 AM  
Blogger ziel said...

Ed - the bright side now though is that you can travel a bit outside your city and get some bargains on homes, and maybe in a few years start up a family? Or maybe better bargains in another year. The city's never been a good place to raise a family.

December 15, 2008 7:19 PM  

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