An Institutional Perspective on the Economics of the Family

Abstract

An institutional perspective emphasizes the fact that behaviour is shaped by rules that humans superimpose on their economic environment. In the context of the family, such rules govern vital processes such as family formation, dissolution, and inter-generational property transmission. Here we outline such a perspective, showing that it has important implications for policy and represents a relatively under-explored area of research in the economics of the family. We first document the extensive and systematic variation in family rules that exists both contemporaneously and historically. We then show that understanding this variation is important, yet under-appreciated, by drawing together a broad range of research that studies the far reaching consequences of family rules. We proceed with a structured review of existing research that attempts to understand the origins of various family rules. The institutional perspective makes clear that much important and exciting work remains to be done in terms of understanding the origin of the rules that govern family-related behaviour.