American Economic Association

Gender Difference: The Role of Endogenous Preferences and Collective Action

Author(s): Elaine McCrate
Source: The American Economic Review, Vol. 78, No. 2, Papers and Proceedings of the One-
Hundredth Annual Meeting of the American Economic Association (May, 1988), pp. 235-239
Published by: American Economic Association
Stable URL: http://www.jstor.org/stable/1818129
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 DIFFERING THEORETICALPERSPECTIVES ON THE HOUSEHOLDt
Gender Difference: The Role of Endogenous Preferences
and Collective Action
By ELAINEMCCRATE*
For the last twenty-five years, our society
has scrutinized relationships between women
and men to an unprecedented degree. In this
discussion-at once a positive description of
behavior and a normative evaluation of
family life-neoclassical economics has con-
tributed important insights concerning the
connection between the labor market and
the family. However, the neoclassical inquiry
has proceeded in remarkable isolation from
interdisciplinary and popular debates which
have focused on the issue of power relations
between men and women-a stance which
ultimately restricts the explanatory scope of
the analysis.
The invisibility of power is particularly
characteristic of the "trade" metaphor for
marriage (Gary Becker, 1981; myself, 1987;
Nancy Folbre, 1986). The exclusive focus on
trade reduces social power to mere purchas-
ing power, which is exercised over technical
resources or consumption goods, not people.
The transaction cost analysis of the family
(Robert Pollak, 1985, and Paula England
and George Farkas, 1986) has a richer con-
ception of power relations between family
members who are locked in bilateral mo-
nopolies, but here power seems to be little
more than a phenomenon endemic to long-
term personal relationships.
tDiscussants: Gary S. Becker, University of Chicago;
Paula England, University of Texas-Dallas.
*Assistant Professor of Economics, University of
Vermont, currently at UCLA, Center for Afro-Ameri-
can Studies, Los Angeles, CA 90024. I thank Samuel
Bowles, Nancy Folbre, Manuel Pastor, and participants
in the Greater Los Angeles Political Economy Seminar
for helpful discussions.
235
In this paper I advance two different
propositions concerning the mechanisms and
consequences of power between men and
women, and use them to consider some con-
crete questions about the household. First,
the mechanisms of power include collective
action (a point argued in other contexts by
Douglass North, 1981; Amartya Sen, 1977;
Albert Hirschman, 1985; Samuel Bowles and
Herbert Gintis, 1986; and Heidi Hartmann,
1976). Second, the consequences of power
include the social construction of gender. A
discriminatory economic system produces
men and women whose socially differenti-
ated capacities for performing and enjoying
various types of work are much more dis-
tinct than their innate endowments. In other
words, preferences and productive abilities
are endogenous. (In this paper, I borrow
from the work of Hirschman, Sen, Gintis,
1972, and many feminist authors such as
Alison Jaggar, 1983, to explore the endoge-
neity of preferences.)
I use two questions to motivate considera-
tion of these claims. The first concerns the
informal marriage contract: why has men's
participation in household labor and child-
care been so slow to change as women's
market income has increased? Time-budget
studies generally show that men's household
labor is not very responsive to women's
market labor. At most, men took on about
two more hours of household responsibilities
per week in the 1970's when women's wage
labor increased dramatically (Ellen Fried and
Susan Settergren, 1986; C. Russell Hill and
Frank Stafford, 1980; Hartmann, 1981). The
second question concerns the formal mar-
riage contract: why are there so many re-
236 A EA PAPERS AND PROCEEDINGS
strictions on marital freedom of contract?
These include the requirement of a lifelong
partnership, the lack of options in the con-
tract's provisions (including those concerned
with possible dissolution), and the prohibi-
tion of homosexual marriages. This last fea-
ture of marriage contracts is so fundamental
that economists have apparently been
satisfied to assume it.
I consider both of these questions in turn,
arguing that they pose special problems for
the two neoclassical approaches, and then
explain how a consideration of endogenous
preferences and collective action can better
illuminate these issues.
I. The DomesticSexualDivisionof Labor
The trade analysis of marriage offers two
contradictory predictions concerning trends
in the domestic sexual division of labor when
women's market incomes increase. The first
prediction results from the extension of the
Coase Theorem to the question of divorce
(H. Elizabeth Peters, 1986). If women's non-
marital wealth increases but total marital
wealth still exceeds the sum of the couple's
wealth as single persons, and if spouses
negotiate over the allocation of wealth
(broadly interpreted to include utility from
different types of work), then one would
expect a reallocation of household labor
among couples who remained married. For
this hypothesis, the rigidity in the domestic
sexual division of labor is an anomaly.
The alternative prediction arising from the
trade analysis follows from Becker's (1981,
1985) elaborations on the theory of com-
parative advantage in marriage. A sex-typed
pattern of human capital investment and
specialization in work is based on women's
comparative advantage in childbearing and
rearing, given constant or increasing returns
to scale in production with specific human
capital (household vs. nonhousehold). If
women have just a slight advantage in the
production of children, then men will spe-
cialize completely in market work and market
investment. An important implication is that
small differences in comparative advantage
will produce big differences in specialization,
MA Y 1988
so even large changes in women's nonmarital
incomes might not be enough to induce
greater household labor among men.
The question remains as to the source of
comparative advantage by gender: while sex
discrimination could account for it, Becker
(1985) strongly suggests that even on some
counter-earth with no discrimination in
market work, there would still be a pro-
nounced sexual division of labor for biologi-
cal reasons. This, of course, involves some
very highly disputed notions of biological
determinism. It also assumes that there are
no significant advantages to children regu-
larly interacting with two adults rather than
one. Thus Becker's arguments about com-
plete specialization can in principle explain
the rigidity in the domestic division of labor,
but they depend largely on some unverified
assumptions.
Transaction cost theory likewise has dif-
ficulty explaining the inertia in men's
household roles. Because both spouses invest
heavily in relationship-specific capital and
make long-term contractual commitments,
marriage is characterized by bilateral mo-
nopoly. Accordingly, the concept of bargain-
ing power as understood in standard game
theory is central to the analysis. While this
expands the notion of power beyond that
adopted in the conventional trade approach,
it presents new problems, which are evident
in the question of housework. In most games,
when threat points move, the solution
changes. One would therefore expect that
wives would negotiate greater household
labor by men as women's nonmarital op-
portunities improve. Yet this appears not to
have happened. England and Farkas' im-
portant observation that women tradition-
ally invested more in the highly idiosyncratic
emotional component of marriage capital
compounds the problem: if women's market
work has reduced the time they invest in
"emotional capital," then one would expect
even greater renegotiation of men's domestic
roles.
The problem common to both standard
game theory and trade theory is the assump-
tion that all the relevant information for
decision making is included in relative prices,
VOL. 78 NO. 2 DIFFERING THEORETICAL PERSPECTIVES ON THE HOUSEHOLD
productivities, or the location of threat
points. Both approaches fail to consider the
social identities of the actors, which may
impede adjustment to changed economic cir-
cumstances. The symmetry property of most
games, which requires that the players be
able to change their objective positions
without altering the outcome of the game,
does not hold in marriage.
Recognition of the endogeneity of prefer-
ences can help resolve the problem about
housework. This view begins by positing 1)
the social production of people, that is, of
their technical and appreciative capacities,
and 2) the ability of people to reflect upon
and change their own preferences. The first
assertion distinguishes this view from liberal
political theory and neoclassical economic
theory, which regard individuals as discrete
bundles of preferences and endowments con-
stituted prior to social life. Instead, I main-
tain that individuals are produced by social
activity, which includes their own actions
in the context of their social experiences
(Bowles-Gintis).
The second premise for the endogeneity of
preferences is Sen's and Hirschman's ob-
servation that people have tastes not just
about external objects or other people, but
also about themselves: in other words, about
their identities. Identity is what these authors
have called a "metapreference" or "value."
While we may not quibble about tastes over
many of the choices we make, we do struggle
regularly with ourselves over who we are and
who we want to be: we have second-order
preferences about our preferences concern-
ing such fundamental issues as manhood or
womanhood.
A male-dominant society limits opportun-
ities for women and men to explore and
develop their identities. Even independently
of manipulation by media and family, wo-
men's preferences will develop differently
from men's. First, if women or men are so
unfamiliar with some of the other sex's work
as to be fundamentally uncertain about what
it is, they cannot rank it in a preference
ordering. Second, if women have reasonable
knowledge of all activities, they will learn
through observation of others, and through
237
their own experience, that the most prom-
ising route to success or fulfillment involves
investing in feminine and maternal identity.
Men learn correspondingly about masculin-
ity. Women therefore choose to learn to pre-
fer mothering over auto mechanics for the
same reason that one would choose to learn
to enjoy winter rather than summer sports in
cold climates: the expected payoff is higher.
This differs from Becker and George Stigler's
(1977) consideration of investment in "con-
sumption capital" by recognizing that the
investment is embodied in people, is not
capable of disinvestment, and thus funda-
mentally changes one's identity.
Hence men and women rationally make
large and long-term investments in sex-typed
preferences or identities, developing very dif-
ferent capacities for tastes, and severely re-
stricting the possibility that they may elect at
some future point to invest in significantly
different tastes. Men's slow entry into house-
hold labor is now more comprehensible:
given such costly, long-term investments in
masculine identity, it would be surprising
indeed if men began to do more child care
just because of a change in relative prices or
productivities, or because of movement of
the threat points. A redivision of family labor
would fundamentally threaten the value of
costly investments in gender identity.
II. The LegalMarriageContract
Conventional trade analysis has said very
little about the peculiarities of the mar-
riage contract. Possibly the objective of
the contract is the efficient production of
children; however, one must then wonder
about the failure to require or enforce child
support from financially able divorced
fathers (Barbara Bergmann, 1986). Becker
(1981) briefly suggests that the contract pro-
tects women whose investments in their
families have reduced their ability to prosper
outside the family. However, it is peculiar
that the traditional marriage contract would
include a no-divorce provision to protect
women, when the costs of divorce have in
part been created by the contract itself. The
marriage contract reduced women's ability
238 A EA PAPERS AND PROCEEDINGS
to maintain a comparable standard of living
outside marriage by restricting their rights to
their own property and earnings, their access
to credit, their mobility, etc., and by not
recognizing the value of their contribution to
their husbands' human capital (Lenore
Weitzman, 1981).
Transaction cost analysis offers a much
more detailed account of the marriage con-
tract, which is similar to the Hobbesian the-
ory of the state. Because the outcome of
bilateral bargaining is unpredictable, and be-
cause not all conflicts can be foreseen, both
spouses assent to external imposition of a
long-term contract to facilitate investment in
relationship-specific capital. The state and
church act to reduce transaction costs, that
is, to avoid the personal and social chaos
arising from unresolved marital conflict.
However, the transaction cost account
cannot explain why the marriage contract
has so overwhelmingly resolved conflict in
men's favor. Why under the principle of
coverture was women's identity subsumed
under men's? Why has dissolution always
been structured so as to increase men's con-
sumption but lower women's? Furthermore,
why is marriage prohibited among homosex-
uals, since there is no identifiable transaction
cost associated with homosexuality? Many
of these rules do not seem to be cost mini-
mizing, but rather cost creating, insofar as
resources must be allocated to their advo-
cacy and enforcement. Indeed, the marriage
contract appears to be a set of rules ad-
vanced by a powerful interest group.
Neoclassical theory has demonstrated the
conditions that must hold for such effective
collective action. First, there must be a group
or coalition which controls enough resources
to promote successfully its own interests.
Second, the group must have means to over-
come the free-rider problem associated with
collective action. Third, it must have means
to maintain cohesion when private incentives
induce individuals to renege on collective
agreements.
The satisfaction of the first condition,
men's substantially greater control of re-
sources, is obvious. The earlier discussion of
people's participation in creating their own
MA Y 1988
identities, given the social circumstances they
experience, elucidates the process by which
the other two conditions might be met. Men
and women can overcome the free-rider
problem because collective action reinforces
their gender identity. As Hirschman has
noted, group identity is available predomi-
nantly by acting as part of a group. Thus
rational individuals are often quite activist
about their own gender roles, and about the
roles of others, over issues ranging from
proper attire to proper work for men and
women. Men may be more effective than
women at developing coalitions over these
concerns: they certainly have more oppor-
tunities to learn collective behavior than do
women, ranging from sports events to legis-
lative sessions.
Several means exist to enforce collective
norms. Culture is one of them: men and
women who deviate from the norms (for
example, men who perform housework) are
punished. Law is another. Law may function
as a form of precommitment to maintain
group solidarity when individuals have pri-
vate incentives to violate group norms. (For
example, laws restricting women's participa-
tion in wage labor may offset husbands' in-
centive to acquire more money income
through wives.) Additionally, law shapes val-
ues.
Consequently, people can act in coalitions
to create laws which have more conse-
quences than simple rule enforcement. They
will attempt as groups to secure legislation
in their economic self-interest, or to rein-
force their identities.
These aspects of marital law are most
relevant for explaining the unusual provi-
sions of the marriage contract, including
the prohibition of homosexual marriage.
Homosexuality threatens gender identity. It
threatens the assumed necessity of a sexual
division of labor which pairs women with
men under implicit and explicit terms which
are often inimical to their economic self-
interest.
In conclusion, this analysis has surely
raised as many questions as it has answered.
However, the questions are fundamental, and
have been greatly neglected by economists.
VOL. 78 NO. 2 DIFFERING THEORETICAL PERSPECTIVES ON THE HOUSEHOLD
Much more philosophical, empirical, and
historical work will be necessary to assess
the relevance of all three approaches in
answering them.
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