When female incomes rise, household expenditure patterns change. One oft-quoted survey paper suggests:
men spend more of the income they control for their own consumption than do women. Alcohol, cigarettes, status consumer goods, even "female companionship" are noted in these studies.
Another well known paper found that a UK policy change that transferred resources from fathers to mothers resulted in more spending on women's and children's clothing. If expenditure patterns change when one sex gains more control over household income, it makes sense that savings behaviour would change too.
In the United States, surrogate mothers receive fees of about $20,000 to $25,000 for their services. In Canada, the U.K., Australia and a number of other countries, commercial surrogacy is outlawed, but surrogates are compensated for expenses, for example, clothing, food, prenatal vitamins, childcare, travel costs, lost wages, medications, medical bills, etc. In the U.K., reported expenses range from £4,500 (in an arrangement that went awry) to £7,000-£15,000.
Compensation for expenses is not taxable income, but commercial fees are. There are, therefore, tax advantages to structuring a contract as "expenses" not "income."
Holiday parties are a time for conspicuous production: "Would you like some bread with sun-dried tomatoes - I just baked it this afternoon? The tomatoes? Oh, they're nothing - I had stacks of them in my garden this year, so I dried them in the solar-powered food drier that I built last summer."
It wasn't always this way. In grade 4, my best friend Suzanne always got Wagon Wheels in her lunch box. How I envied her. I just had boring home made cookies. Back then, prepared foods were relatively expensive, and their consumption signaled social status.
Fast forward a generation. Many middle-class families rely on two incomes to pay the mortgage, and time has become the scarce resource. Sure, I could afford to buy Wagon Wheels for my kids. I don't, because granola bars are (slightly) healthier. It wouldn't matter anyways. The new status good is a home made cookie - when time is precious, anything home made is a luxury.
Recent research by Douglas Almond, Lena Edlund, and WCI regular Kevin Milligan has found evidence of "son preference" - families planning their children to make sure that they have at least one son - within some ethnic groups in Canada. The paper does a number of careful and rigorous tests which are hard to explain in 400 words or less, but this finding is simple and easy to understand:
Some background: ideally, a person's tax liabilities reflect his or her ability to pay taxes. Most tax systems recognize that having children reduces ability to pay, so provide parents with some kind of tax relief.
In the late 1970s, the British government changed its "child tax allowance" - a tax deduction generally claimed by the higher income parent - into a child benefit, received by the mother. The policy provided greater benefits to lower income parents, who did not earn enough to benefit from the child tax allowance, and put income in the hands of mothers. It made a difference: Shelley Lundberg, Robert Pollak and Terry Wales found that families began spending more money on goods for children after child benefits were introduced.
The latest announcement means that "any couples where one parent earns about £44,000" will have to repay some or all of their child benefit.
I'm spending today writing a review of Caren Grown and Imraan Valodia's new book Taxation and Gender Equity.The review is for the journal Feminist Economics, but I'll give you an uncensored sneak preview of the good bits here.