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Book Review
May 2024

Unraveling long-term household changes through economic modeling

Evolving Households: The Imprint of Technology on Life. By Jeremy Greenwood. Cambridge, MA: The MIT Press, 2019, 316 pp., $60 hardcover.

In his presidential address delivered at the 100th meeting of the American Economic Association in 1987, Gary S. Becker, a recipient of the Nobel Prize in Economic Sciences in 1992, stated the following: “Modern economists neglected the behavior of families until the 1950s. Since then, economic analysis has been used to explain who marries whom and when (if ever) they divorce, the number of children and investments in each child’s human capital, the extent and timing of labor force participation by married women, when elderly parents rely on children for support, and many other family choices.” Today, many economists continue to explore social issues akin to those cited by Becker, developing quantitative economic models to study questions such as these: What can explain the rise in female labor supply? Is there a stable relationship between fertility and income over time? What accounts for the increase in the number of single households? Does childcare availability play a role in maternal employment and children’s development? Do couples bargain over fertility? How much do norms matter for the quantity and quality of children?

In Evolving Households: The Imprint of Technology on Life, Jeremy Greenwood, an economics professor at the University of Pennsylvania, addresses these and related questions by developing economic models to integrate and interpret a vast body of evidence derived from long-run trends, mostly for U.S. households. Greenwood explores various topics, including the division of labor in the married household and the rise in the labor force participation of married women (chapter 1); the long-run decline in fertility, the choice between jobs and kids, and the baby boom in the United States and other advanced nations (chapter 2); the decline in marriage and the rise in positive assortative mating (chapter 3); the nexus between culture, social norms, and technological advances (chapter 4); and the impacts of technological progress on the healthcare sector, the rise in life expectancy and healthcare expenditures, and the trend toward increased time spent in retirement (chapter 5). Chapter 6 concludes the book. Each chapter presents stylized facts reflecting data on changes in long-term trends, along with historical anecdotes. Additionally, each chapter concludes with a literature review related to its respective topic area, as well as several problems for readers to solve.

The book’s central argument is that technological advancements in the home and the marketplace have had a substantial effect on various aspects of household life. This intricate relationship is explored through economic models and mathematical analyses accompanied by historical data, examples, and anecdotes. The book is rich in economic statistics, which help demonstrate trends and secular changes in household economic activities over time.

Chapter 1 argues that the sharp rise in the labor force participation of married women throughout the 20th century can be attributed to advancements in technology both within households and in the marketplace. The chapter presents the unisex single model of labor supply (the first model presented in the book), which Greenwood uses to derive the key equations and comparative relationships underlying the analysis by focusing on consumption and leisure as the main variables of interest. Then, this model is extended, with the author considering a married couple and analyzing the labor supply of married women. The chapter identifies three potential causes of the rise in the labor force participation of married women: (1) household-sector technological advancements stemming from the introduction of labor-saving appliances and subsequent price declines for these appliances, (2) industrialization, and (3) a reduction in the gender wage gap, manifested as an increase in the ratio of women’s to men’s wages. Chapter 1 also introduces and discusses household production, that is, the transformation of purchased intermediate goods (such as microwaves, refrigerators, vacuum cleaners, and washing machines) into home goods (such as meals and clean clothes).

Chapter 2 studies and formalizes the idea that technological progress, which boosts real wages, has driven the long-term decline in fertility. In simpler terms, this idea suggests that as each additional unit of labor contributes more to output, the value of labor increases, raising the opportunity cost associated with having a child. To demonstrate this relationship with data, Greenwood presents widely used measures of fertility and long-term changes in those measures. The author proceeds by discussing the baby-boom phenomenon, arguing that it began in the 1930s in both the United States and many rich countries. This chapter also presents a model that examines the effect of advancements in obstetric and pediatric medicines on fertility.

Chapter 3 introduces alternative measures for marriage and divorce rates within a country, focusing on historical trends in the United States. It also presents a simple model of marriage by using the household production process discussed in chapter 1. Greenwood emphasizes three factors contributing to the marriage decline. First, wage increases make establishing a one-person household more financially feasible. Second, advancements in labor-saving technologies used by households reduce the time required to maintain a one-person household. Third, significant decreases in the prices of timesaving home appliances make those appliances more affordable, and as incomes increase, the benefits of marriage diminish.

Chapter 4 presents significant milestones in the advancement of women’s rights in the United States. Here, Greenwood develops a model to illustrate the process by which women attain rights in the workplace and to demonstrate how society’s attitudes toward working mothers have shifted over time. The author then discusses the sexual revolution, highlighting the related technological advances in contraception as an ideal case study for analyzing social change. This discussion is supplemented with a brief history of technological progress in contraception and an account of contraception’s effectiveness and usage.

Chapter 5 presents a model of life expectancy and healthcare spending, while also documenting trends in retirement. Greenwood suggests that, by increasing wages and reducing prices, technological advancements have rendered leisure goods more affordable. This increase in affordability has motivated individuals to allocate more time toward leisure activities in the later stages of their lives and thus enhance their enjoyment.

Greenwood concludes the book by writing that “technological progress has led to an evolution in the form of households and has made an imprint on everyday life. It will continue to do so in the future, and mostly in ways that are unforeseen.” He is right. In today’s age, smart-home devices, automation, and digital communication tools are changing daily routines and communication patterns within households, as well as affecting social change. The introduction of new appliances and the integration of digital technologies into everyday routines are likely to trigger the development of new economic models for understanding the changing nature of households in response to technological advancements.

While Evolving Households introduces and develops relevant economic models, it does not extensively cover the specifics of how to confront these models with data, although some parts of the book mention calibration methodology (i.e., the tuning of a model to match certain features of data). A manuscript titled Numerical Methods for Macroeconomists and authored by Greenwood and Ricardo Marto provides a guide for properly calibrating economic models (and numerically solving them) and can be a valuable accompanying resource. Evolving Households excels in the elegance of its graphs and the presentation of data. All graphs are clear, accurate, and informative, without overwhelming the reader with unnecessary information.

Who should read Evolving Households? The book is well suited for advanced undergraduate students learning how to construct economic models for the study of household economic decisions and behavior; graduate students researching long-term changes in social dynamics, gender issues, and related topics; and lecturers teaching undergraduate economics courses (several sections of the book can be incorporated into lectures). Researchers with backgrounds in history or sociology may also find the economic statistics and narratives presented in the book valuable. Finally, the book can ignite the interest of students and other readers in the history of economic thought.

Evolving Households may not be suitable for a general audience because of its focus on mathematical modeling. However, Greenwood provides references to many readings appropriate for laypeople, while also critiquing several others for being “long on words and short on facts.” One missing reference is Robert J. Gordon’s The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War, which provides a detailed account of the rise of American living standards between 1870 and the 1970s, including indepth discussions of the diffusion of modern appliances and technology. These discussions, read alongside the economic models presented in Evolving Households, would greatly enrich a student’s understanding of the profound technological changes shaping the household.

Evolving Households was published before the COVID-19 pandemic. If we ever see another edition of the book, it will likely offer an exploration of how the pandemic has affected household behavior and choices, including the increasing prevalence of working from home.

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About the Reviewer

Murat Ungor

Murat Ungor, Ph.D., is a senior lecturer in the Department of Economics at the University of Otago, New Zealand.

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