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By casual empiricism, it seems that many firms take explicit account of the family ties connecting workers, often hiring individuals belonging to the same family or passing jobs on from parents to their children. This paper makes an attempt to explain this behaviour by introducing the assumption of altruism within the family and supposing that agents maximise a family utility function rather than an individual one. This hypothesis has been almost ignored in the analysis of the relationship between employers and employees. The implications of this assumption in the efficiency wage models are explored: by employing members of the same family, firms can use a (credible) harsher threat involving all the family's members in case of one member's shirking - that allows them to pay a lower efficiency wage. On the other hand, workers who accept this agreement exchange a reduction in wage with an increase in their probability of being employed: this can be optimal in situation of high unemployment. Moreover, the link between parents and children allows the firm to follow a strategy that solves the problem of an individual's finite time horizon through family's reputation.
The main work-life balance policies promoted by government focus on the amount of time mothers spend at work. This report challenges this approach. It suggests that what happens inside the workplace and how this interacts with family life is just as important.
Abstract: Flexible labor markets require geographically mobile workers to be efficient. Otherwise, firms can take advantage of the immobility of workers and extract monopsony rents. In cultures with strong family ties, moving away from home is costly. Thus, individuals with strong family ties rationally choose regulated labor markets to avoid moving and limiting the monopsony power of firms, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. There are also positive cross-country correlations between the strength of family ties and labor market rigidities. Finally, we find positive correlations between labor market rigidities at the beginning of the twenty first century and family values prevailing before World War II, which suggests that labor market regulations have deep cultural roots
We study the role of the most primitive institution in society: the family. Its organization and relationship between generations shape values formation, economic outcomes and influences national institutions. We use a measure of family ties, constructed from the World Values Survey, to review and extend the literature on the effect of family ties on economic behavior and economic attitudes. We show that strong family ties are negatively correlated with generalized trust; they imply more household production and less participation in the labor market of women, young adult and elderly. They are correlated with lower interest and participation in political activities and prefer labor market regulation and welfare systems based upon the family rather than the market or the government. Strong family ties may interfere with activities leading to faster growth, but they may provide relief from stress, support to family members and increased wellbeing. We argue that the value regarding the strength of family relationships are very persistent over time, more so than institutions like labor market regulation or welfare systems.
This paper sheds light on the role of family networks in the dynamics of a West African labour market, i.e. in the transitions from unemployment to employment, from wage employment to self-employment, and from self-employment to wage employment. It investigates the effects of three dimensions of the family network on these transitions: its structure, the strength of ties and the resources embedded in the network. For this purpose, we use a first-hand survey conducted in Ouagadougou on a representative sample of 2000 households. Using event history data and very detailed information on family network, we estimate proportional hazard models for discrete-time data. We find that family networks have a significant effect on the dynamics of workers in the labour market and that this effect differs depending on the type of transition and the considered dimension of the family network. The network size appears to not matter much in the labour market dynamics. Strong ties however play a stabilizing role by limiting large transitions. Their negative effect on transitions is reinforced with high level of resources embedded in the network.
This book explores the relationship between families, firms, and regions and the extent to which these relationships contribute to regional economic and social development. Although family business participation in economic activities has been a common phenomenon since pre-industrial societies, and its importance has evolved throughout time and across spatial contexts, the book suggests that these factors have often been neglected in family business and regional studies. Taking this research gap into account, the book aims to deepen our understanding of the role family firms play in the regional economy. In particular, it explores two seldom studied questions. Firstly, what role do family firms play in regional development? Secondly, how do different spatial regional contexts shape family firm operations and performance? Family Business and Regional Development presents a model of "spatial familiness" and uses themes such as productivity, networks and competitiveness to shed new light on family businesses. Moreover, it approaches the juxtaposition between family business and regional studies to encourage the cross-fertilisation of ideas, theories, and research methods between the two fields. Bringing together leading experts in entrepreneurship, regional economics, and economic geography, this book will be a valuable reading for advanced students, researchers and policymakers interested in family firms, regional studies and economic geography.
In the present stage of international capitalist development, women are increasingly being drawn into paid employment by multinational and state investment in the Third World. This volume investigates the interrelations between women's participation in the urban wage economy and their productive and reproductive roles in the household and family. It brings together a selection of important recent research on all major regions of the developing world by leading scholars in this emerging field. It argues that the household itself is an important determinant of the character and timing of women's labour force participation, and it assesses the extent to which family patterns can be expected to change as women increasingly work outside the home.
We argue that an important determinant of voters' support for economic reform is the strength of family ties. While the “crisis hypothesis” predicts that crises facilitate reform, we show in a political economy model that this relation can break down, and even reverse, when agents take into account the effect of reform on their family members. Applied to southern European countries with strong family ties, the model rationalizes why the extremely high (youth) unemployment following the Great Recession has not led to more substantial labor market reforms. In such countries austerity might block rather than foster additional structural reforms.
Parents around the world grapple with the common challenge of balancing work and child care. Despite common problems, the industrialized nations have developed dramatically different social and labor market policies—policies that vary widely in the level of support they provide for parents and the extent to which they encourage an equal division of labor between parents as they balance work and care. In Families That Work, Janet Gornick and Marcia Meyers take a close look at the work-family policies in the United States and abroad and call for a new and expanded role for the U.S. government in order to bring this country up to the standards taken for granted in many other Western nations. In many countries in Europe and in Canada, family leave policies grant parents paid time off to care for their young children, and labor market regulations go a long way toward ensuring that work does not overwhelm family obligations. In addition, early childhood education and care programs guarantee access to high-quality care for their children. In most of these countries, policies encourage gender equality by strengthening mothers' ties to employment and encouraging fathers to spend more time caregiving at home. In sharp contrast, Gornick and Meyers show how in the United States—an economy with high labor force participation among both fathers and mothers—parents are left to craft private solutions to the society-wide dilemma of "who will care for the children?" Parents—overwhelmingly mothers—must loosen their ties to the workplace to care for their children; workers are forced to negotiate with their employers, often unsuccessfully, for family leave and reduced work schedules; and parents must purchase care of dubious quality, at high prices, from consumer markets. By leaving child care solutions up to hard-pressed working parents, these private solutions exact a high price in terms of gender inequality in the workplace and at home, family stress and economic insecurity, and—not least—child well-being. Gornick and Meyers show that it is possible–based on the experiences of other countries—to enhance child well-being and to increase gender equality by promoting more extensive and egalitarian family leave, work-time, and child care policies. Families That Work demonstrates convincingly that the United States has much to learn from policies in Europe and in Canada, and that the often-repeated claim that the United States is simply "too different" to draw lessons from other countries is based largely on misperceptions about policies in other countries and about the possibility of policy expansion in the United States.