Family, Education, and the Care Economy

Jeffrey D. Sachs | PASS Academician

Family, Education, and the Care Economy

Family as core to human nature

The role of the family is core to human nature. Families are found in all societies throughout human history, and the origins of the family are evolutionarily deep. We must better understand the economic context in which the family operates and provides specific functions, as all aspects of society change over time and impinge on the family.

The ways that families operate have changed over time, as the ecology of the family changes. Change has been rapid and fundamental in the last two centuries. It has also been extraordinarily cruel at times, as in the case of colonial rule, which caused the extirpation of culture, language, and the capacity of the family to operate to fulfill its basic role in society. In this paper, we will discuss the basic role of the family for child raising.

Evolutionary development of the human family structure

Human families differ from those of other species, including higher primates. This is most likely due to the coevolution of brain size, family, and socialization. Evolutionary biology finds that family, specifically monogamous pair-bonding, is fundamental to human nature and human evolution, related to the rapid and distinctive development of human brain size, which is co-evolutionary with our core sociality.[1] Our human existence as social animals is deeply related to encephalization, or our large prefrontal cortexes and our capacity for language and interaction.[2]

Encephalization gives humans a distinctive life history. There is a very long period of maturation for human infants. This long period of maturation means that there is a remarkably heavy burden on parents to nurture an offspring for a long period of time. The human brain is not fully developed at birth. Human brain maturation has very high energetic costs and requires very high commitment of parental energy in the first few years. It also means that during these years of intensive care, children and youth under adult supervision are highly vulnerable. Thereafter, the use of that large brain takes a lifetime.

There is a coevolution of encephalization with the need for intensive investments by parents in the success of the survival of the child. The fundamental function of the family is extended child raising to enable the child to grow and develop physical, cognitive, and social capacity. Parenting can be collective, not only between two biological or legal parents, but part of an extended alloparenting network, including grandparents and others in the community.

The economic functions of the family

From an evolutionary and human nature point of view, the most fundamental role and core purpose of the family is to raise healthy offspring. Parents actively participate in this extended period of child raising. In economic terms, there are also several fundamental functional roles of the family.

Families can be considered in terms of work to provision and maintain the household. The manners and means by which a household provisions itself and stays alive are very contextual: work can occur within the household, on a subsistence plot of land, or for the market, among others. For most of history, work was not done for the market or for monetary exchange; it was for self-provision, or for a small band of people. There have been fundamental changes in technology and the nature of the work environment across human history.

Households are multi-generational, with care given in two or more directions. Children often engage in elder care of aging parents. Grandparents help raise their grandchildren. Care is also given for kin, spouses, and siblings, for example, in periods of illness or disability. This is fundamental for all societies.

There is a tremendous amount of risk sharing within an extended household, including interpersonal risk sharing, economic and financial risk sharing, and intergenerational risk sharing. Intergenerational transfers such as inheritance play an important role in the life of the family, although economic context, inheritance laws, and culture change enormously both over time and space.

Finally, the family has an essential role of love, companionship, and psychosocial well-being. Support from our families ensures the transition from generation to generation.

Global variation in family structure

Policies that aim to support the family in the face of ongoing shifts in work, education, and the role of the state must keep in mind the variation in typical family structure around the world.

In a literature review of economic studies on family types, Baudin, de Rock, and Gobbi point out social and economic characteristics typically associated with the three broadly defined family organizing structures: Nuclear, stem, and complex (Table 1)[3].

Table 1: Family types and their associations (from Baudin, de Rock, and Gobbi 2021).

The authors suggest that nuclear households are associated with individualism, land scarcity, collective choice models, and Christianity; stem families are associated with old age support, agricultural economies, and dynastic preferences; and complex families are associated with traditionalism, high income uncertainty, and poor public goods provision and institution.

Figure 2 shows the fraction of the population by country in nuclear, monogamous families. The vast majorities of families are nuclear in the United States, Canada, Western Europe and Scandinavia, and Australia.

[From Baudin, de Rock, and Gobbi 2021]

Figure 3 shows the fraction of the population by country in stem families. Stem families are most prevalent in Central Europe, North and South Korea, and Japan.

[From Baudin, de Rock, and Gobbi 2021]

Finally, Figure 4 shows the fraction of the population by country in complex families. Complex family structures can be found across much of Latin America, Asia, and Africa, but are especially prevalent in, for instance, Algeria, Mauritania, Somalia, Yemen, the Balkan Region, and parts of Central Asia.

[From Baudin, de Rock, and Gobbi 2021]

Areas of change that impinge on family structure

Economists recognize that family functions depend on context: the state of technology, the available tools, and the nature of exchange and work. I note here seven areas of fundamental change that impinge on family structure. These include: 1) Changing role of education and skills in life-cycle, 2) Changing organization of work (home versus outside), 3) Mechanization and time use (agriculture, domestic work), 4) Role of state in education, 5) Role of state in child and old-age support, 6) Role of state in social protection, and 7) Role of the state in legal structures of family (inheritance, gender, eligibility for marriage, divorce, parental leave, polygyny, etc.).

In modern times, the changing role of education and skills is most fundamental. The skills needed for success today are wholly different than those needed two centuries ago, and this is true for most of humanity. Therefore, the role of education is fundamental. One of the cruelest parts of colonialism was the denial of education in a systematic way to colonized populations. Education was seen as extremely dangerous, and the practice was to educate only a few of the colonial subjects so they could be local administrators. Literacy was dangerous, because then the colonized would “find out” about their subjugation and have means to counteract it. The failure of education in colonial societies is a profound cruelty in economic terms.

The second big change that confronts families is the change of the organization of work. Most work today occurs outside of the home, although with “work from home” and teleworking, this work may physically be coming back to the home. In the past, most work occurred within the household or on neighboring land, as people worked farms or foraged in their local areas. Women, who have worked harder than men throughout history, often performed domestic work of various kinds, making clothing, preparing food, raising children, and keeping the home organized and provisioned. Additionally, there may now be another fundamental change of work occurring, as we de-materialize work. The shift of work from inside to outside the home over the last 200 years has come with huge implications for the family. Parenting requires a division of labor within the household, which depends on the economic context in which the parents engage in parenting.

A third fundamental area of change is mechanization of work, which has changed time-use everywhere. The mechanization of agriculture has had fundamental implications: as one extreme example, while agriculture composed 90% of household principal employment three centuries ago worldwide, currently in the United States, just 1% of households feed the rest, plus net exports. It is not that there is necessarily more output per hectare, but industrialized farms have massive hectarage farmed by self-driving tractors, harvesters, and grain combines with almost with no farmers. Mechanization has fundamentally changed what people do, and where they live.

These changes have changed the role of the state in fundamental ways. The fourth major change I will consider is the first role of the modern state, other than warfare, which was education. Mass primary education for children – only white children – came early to the United States. I note that this education came along with mass slaughter, slavery, and genocide of African slave and Native American populations, but the mass education for white children was pervasive. Where there were large African slave populations, particularly in the US South, there were few public schools, as public education was complicated in a land of enslaved peoples. The role of the state in education was a fundamental transformation, despite the disenfranchisement of large segments of the population.

Fifth, the role of the state in child and old age support and sixth, the role of the state in social protection developed in the 20th century. Finally, the state always has had a role in the legal structure of the family in terms of inheritance, including gender rights to own property or to marry; eligibility principles for marriage, like age or other kinds of eligibility; divorce law; parental leave, although that is a very specific modern phenomenon; reproductive rights; polygyny; and so forth. These are under state governance in the context of the modern nation state, and these rules are changing. The roles of family to educate children, maintain a division of labor for child raising, provide social support, and mitigate risk protection have been profoundly altered.

Implications of setting on family structure

Table 2. Economics and Family Structure (Some Examples)

Different family settings have different implications for how families operate (Table 2). Settings for families can be rural pre-industrial or urban industrial of the 19th and 20th centuries, the late post-industrial service economy of the late 20th century, or the digital urban age. Changes are seen in the left-hand column: child mortality, for example, has transformed in the last two hundred years from mortality rates of almost 50% of children dying before the age of five, to now far under 5% of children dying by the age of five in almost all societies of the world.

Investment in education and economic implications for families

Two hundred years ago, investment in formal educational was basically non-existent; almost everyone was illiterate. Manual laborers, such as farmers, serfs, or slaves, were supposed to labor until they dropped dead of the burdens. However, during the urban industrialization of the 19th century in Europe, primary education was recognized as necessary. By the late 20th century, high school education at a universal level (if it could be afforded) was recognized as needed. These days, high school education is not enough to achieve the lives to which people aspire.

These have led to changing net economics of raising children. On a farm, children were a net economic asset because by the age of five, they could start to perform work and chores for the household. In an urban setting where children are supposed to go to school through the age of 18, children are now a cost center rather than a profit center for parents. Children are also likely to move away, so they do not provide guaranteed social security for parents. Education is very expensive, even if it is state provided, because it requires a tremendous amount of household investment and children do not work during this period. Rising education levels mean that that the number of children that a household can afford decreases considerably, which is known as the demographic transition.

Education of young children has also changed the nature of work, particularly for women. Children leave the home earlier for more formal educational settings, at age six or seven for primary education, or even at age three or four for pre-kindergarten education in economies that can afford to send these children to school. Children are increasingly out of the home in younger years, and mothers are also often out of the home. This is a mutual relationship that has created high levels of women’s labor force participation in places that have made investments in high levels of institutional education of young children.

Old age security has changed fundamentally because it’s been taken as a state function in most of the world. The result is a decisive change of family structure, from complex multi-generational families to nuclear families. This change comes into conflict with long-held, deep cultural norms, but is a widespread process.

Figure 1. Rising Educational Needs (Capital-Skill Complementarity) Is a Key Driver of Modern Family Change. Chart from Our World in Data: Mean years of schooling, 1870 to 2017.

Work that is basically repetitive and physical is replaced by new technologies, particularly machines. Work that is repetitive and cognitive is now being replaced by smart systems. Machines, rather than human beings, answer our phone calls for purchasing, ordering, and customer service: these are repetitive actions that machines can do. For human work activity, this means that a large and growing class of jobs has disappeared. Remunerative jobs are now those with higher and higher levels of education.

In the 19th century, one could still provision the household, having no education. By the mid-19th century in industrial economies, you needed basic literacy and numeracy. By the middle of the 20th century, in the United States, to get a decent job you needed a high school education. By the 1970s or 1980s, to get a decent job, you needed a bachelor’s degree. This kind of escalation of educational needs is driven by technological change, and fundamentally changes what the family does. For an affluent family in the high-income world, the principal responsibility for a parent, in addition to love, protection, and providing a safe environment, is to ensure that your children have a university education. That’s a long and expensive 25-year process. This very hard to do for most families.

Table 3. Occupational Composition of the US Labor Force: Decline in Arduous Physical Work

I cannot emphasize enough the fundamentality of the economic transformation that is accelerating today. In the United States in 1900, only 4% of the jobs were classifiable as professional, and 36% were agricultural. Per Table 3, as of 2015, the makeup is 1% agricultural, 39% professional workers. Instead of 60% being production or agricultural workers in 1900, as of 2015, only 15% are in production and that number continues to decline. Professional careers are 39% by 2015 and continuing to rise.

Education is changing everything. It is dramatically raising the cost of child rearing. It is widening social and economic inequalities. It is contributing to ending child labor because children need to be in school. It is shifting child rearing increasingly outside of the family. It is giving rise to the need for large public budgets. It is leading to the demographic transition. It is shifting the participation of girls and women in school and the paid labor force. These are global transformations, shaped fundamentally by technology and by relative economic structure and culture.

The educational transformation imposes very high financial stress on most households. In the United States, an economy with $60,000 per capita income, about 30% of households can cope, the ones with college educated parents; the rest of the households cannot. In poor countries, it is impossible to carry out the functions of educating children for a 21st century economy. This tremendous financial and familial stress results in poor nutrition, toxic stress, an epidemic of adolescent depression (as is underway in the United States, not to mention other places), and tremendous family instability (especially as a result of economic male migration). There are many difficulties that arise; for example, a lack of childcare disallows women equal participation in the labor force and makes effective child raising harder. Households that do not have adequate levels of education also have insufficient investments in education for their children and intergenerational transmission of poverty.

Public policy therefore plays a very special role in making sure that active government provides the financial means necessary for families to carry out their responsibilities. This can be in the form of direct social support to families; old age support; childcare support; educational, nutrition, and health care support; and social insurance.

21st century challenges for family policy include the socialization of costs of health care, nutrition, family leave, childcare, and education. There needs to be adequate financial support for families in need. Aging populations are rendering elder care more and more complex. Rising demands of education mean that we need to redesign education to be continuing education throughout a lifetime with micro-degrees or micro-certifications in skills along the way. There needs to be more work flexibility, including a lot more work from home, which is most likely a good thing in the end. Finally, there is a massive need to modernize our social benefits to align with what is still an unpaid care economy, largely in the responsibility of mothers who are caring for their parents, their children, and trying to keep the households together, while also trying to be part of the paid labor force.




[1] See Robert J. Quinlan, “Human pair-bonds: Evolutionary functions, ecological variation, and adaptive development”, in Evolutionary Anthropology 17 (2008): 227-238; Hope Klug, “Why monogamy? A review of potential ultimate drivers”, in Frontiers in Ecology and Evolution 6, no. 30 (2018); and Garth J.O. Fletcher et al., “Pair-bonding, romantic love, and evolution: The curious case of Homo sapiens”, in Perspectives on Psychological Science 10, no. 1 (2014): 20-36.

[2] See C. Varea and C. Bernis, “Encephalization, reproduction, and life history”, in Human Evolution 28, no. 1-2 (2013): 1-16.

[3] Thomas Baudin, Bram De Rock, and Paula E. Gobbi, “Economics and family structures”, ECARES working paper 2021-21 (September 2021), updated January 2022.