Parental dividend

Last updated

The parental dividend is a policy proposal first suggested by economist Shirley P. Burggraf [1] [2] during a Bunting Fellowship at Radcliffe College. It proposes replacing the current generalized labor market funding apparatus of the US Social Security system with one that preferentially rewards parental labor and investment. [3] [4] [5] While the current US Social Security system collects payroll taxes from working adults and redistributes them to retirees in amounts based on pre-retirement earnings, [6] the parental dividend is a retirement benefit calculated according to the income of one's own adult children. [7] [8] [9]

Contents

Background

Shirley P. Burggraf's parental dividend is described in The Feminine Economy and Economic Man: Reviving the Role of the Family in the Post-Industrial Age (1997). [7] The proposal has been described as an atypical feminist approach to solving crises of the American family unit by relying on market forces. [10] According to sociologist David Popenoe on the topic of the parental dividend, “We should launch a society wide discussion of what would be the most far-reaching family policy of all: restructuring the national Social Security system.” [11]

Theory

Parental dividend theory is based on the idea that the future productivity of children can be helped or harmed by Social Security payments made in real-time by families to retirees. [12] Financial knock-on effects of the parental dividend depend on a link between the long term successes of children and the amount of time parents spend rearing them. [13] The greater the parental investment in terms of time and money, the greater a child's income is likely to be in adulthood. [14] By changing the financial system supporting Social Security to preferentially assist parents in retirement, the work and costs of parenting become valuable [15] and children raised in this environment would have a greater potential to earn more as adults, therefore resulting in greater retirement benefits for their parents. [16] [17]

According to economists Burggraf and Grossbard-Shechtman, Social Security with a parental dividend would remove the burden of paying for retirement twice, first in payroll taxes for one's own retirement through the US Social Security System, and simultaneously paying for the retirement of one's parents receiving low Social Security benefits thanks to their own opportunity costs of childcare. [18] The concept links expenses associated with raising children, especially the opportunity costs of lost wages, to workers' time outside the work force resulting in reduced Social Security benefits. In this way, the parental dividend seeks to address a potential financial problem in the current US Social Security system, namely that the largest Social Security payments currently go to retirees who spent the least amount of time raising children. [19] [20]

Related Research Articles

Economic security or financial security is the condition of having stable income or other resources to support a standard of living now and in the foreseeable future. It includes:

<span class="mw-page-title-main">Social Security (United States)</span> American retirement system

In the United States, Social Security is the commonly used term for the federal Old-Age, Survivors, and Disability Insurance (OASDI) program and is administered by the Social Security Administration (SSA). The Social Security Act was passed in 1935, and the existing version of the Act, as amended, encompasses several social welfare and social insurance programs.

<span class="mw-page-title-main">Gary Becker</span> American economist (1930–2014)

Gary Stanley Becker was an American economist who received the 1992 Nobel Memorial Prize in Economic Sciences. He was a professor of economics and sociology at the University of Chicago, and was a leader of the third generation of the Chicago school of economics.

<span class="mw-page-title-main">Feminist economics</span> Gender-aware branch of economics

Feminist economics is the critical study of economics and economies, with a focus on gender-aware and inclusive economic inquiry and policy analysis. Feminist economic researchers include academics, activists, policy theorists, and practitioners. Much feminist economic research focuses on topics that have been neglected in the field, such as care work, intimate partner violence, or on economic theories which could be improved through better incorporation of gendered effects and interactions, such as between paid and unpaid sectors of economies. Other feminist scholars have engaged in new forms of data collection and measurement such as the Gender Empowerment Measure (GEM), and more gender-aware theories such as the capabilities approach. Feminist economics is oriented towards the goal of "enhancing the well-being of children, women, and men in local, national, and transnational communities."

<span class="mw-page-title-main">Social Security Administration</span> Independent agency of the U.S. federal government

The United States Social Security Administration (SSA) is an independent agency of the U.S. federal government that administers Social Security, a social insurance program consisting of retirement, disability and survivor benefits. To qualify for most of these benefits, most workers pay Social Security taxes on their earnings; the claimant's benefits are based on the wage earner's contributions. Otherwise benefits such as Supplemental Security Income (SSI) are given based on need.

<span class="mw-page-title-main">Welfare</span> Means-oriented social benefit

Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifically to social insurance programs which provide support only to those who have previously contributed, as opposed to social assistance programs which provide support on the basis of need alone. The International Labour Organization defines social security as covering support for those in old age, support for the maintenance of children, medical treatment, parental and sick leave, unemployment and disability benefits, and support for sufferers of occupational injury.

<span class="mw-page-title-main">Parental leave</span> Time taken off to care for a new child

Parental leave, or family leave, is an employee benefit available in almost all countries. The term "parental leave" may include maternity, paternity, and adoption leave; or may be used distinctively from "maternity leave" and "paternity leave" to describe separate family leave available to either parent to care for small children. In some countries and jurisdictions, "family leave" also includes leave provided to care for ill family members. Often, the minimum benefits and eligibility requirements are stipulated by law.

The socialist market economy (SME) is the economic system and model of economic development employed in the People's Republic of China. The system is a market economy with the predominance of public ownership and state-owned enterprises. The term "socialist market economy" was introduced by Jiang Zemin during the 14th National Congress of the Chinese Communist Party (CCP) in 1992 to describe the goal of China's economic reforms.

<span class="mw-page-title-main">Aid to Families with Dependent Children</span> Federal assistance program in the U.S. from 1935 to 1997

Aid to Families with Dependent Children (AFDC) was a federal assistance program in the United States in effect from 1935 to 1997, created by the Social Security Act (SSA) and administered by the United States Department of Health and Human Services that provided financial assistance to children whose families had low or no income.

<span class="mw-page-title-main">Social insurance</span> Government-sponsored social program

Social insurance is a form of social welfare that provides insurance against economic risks. The insurance may be provided publicly or through the subsidizing of private insurance. In contrast to other forms of social assistance, individuals' claims are partly dependent on their contributions, which can be considered insurance premiums to create a common fund out of which the individuals are then paid benefits in the future.

<span class="mw-page-title-main">Sociology of gender</span> Branch of the discipline of sociology

Sociology of gender is a prominent subfield of sociology. Social interaction directly correlated with sociology regarding social structure. One of the most important social structures is status. This is determined based on position that an individual possesses which effects how they will be treated by society. One of the most important statuses an individual claims is gender. Public discourse and the academic literature generally use the term gender for the perceived or projected (self-identified) masculinity or femininity of a person.

Family economics applies economic concepts such as production, division of labor, distribution, and decision making to the family. It is used to explain outcomes unique to family—such as marriage, the decision to have children, fertility, time devoted to domestic production, and dowry payments using economic analysis.

<span class="mw-page-title-main">Nancy Folbre</span> American feminist economist

Nancy Folbre is an American feminist economist who focuses on economics and the family, non-market work and the economics of care. She is professor of economics at the University of Massachusetts Amherst.

<span class="mw-page-title-main">Human sex ratio</span> Ratio of males to females in a population

The human sex ratio is the ratio of males to females in a population in the context of anthropology and demography. In humans, the natural sex ratio at birth is slightly biased towards the male sex. It is estimated to be about 1.05 or 1.06 or within a narrow range from 1.03 to 1.06 males per female.

The social dividend is the return on the natural resources and capital assets owned by society in a socialist economy. The concept notably appears as a key characteristic of market socialism, where it takes the form of a dividend payment to each citizen derived from the property income generated by publicly owned enterprises, representing the individual's share of the capital and natural resources owned by society.

Household economics analyses all the decisions made by a household. These analyses are both at the microeconomic and macroeconomic level. This field analyses the structures of households, the behavior of family members, and their broader influence on society, including: household consumption, division of labour within the household, allocation of time to household production, marriage, divorce, fertility, investment in children, and resource allocation. Malthus and Adam Smith studied the economics of the family in part by looking at the relationship between family size and living wage. Similarly, J.S. Mill and Le Play analysed the impacts of different family structures on the standard of living of different family members through redistribution of family resources, insurance and self production.

Shoshana Grossbard is an economist and professor of economics emerita at San Diego State University. She is also a member of the Family Inequality Network, HCEO, University of Chicago and a research fellow at the Institute for the Study of Labor and the CESifo Institute. She is a well-published scholar as well as a founder of two organizations related to household economics: a journal, the Review of Economics of the Household founded in 2001 and the Society of Economics of the Household. The Society (SEHO) holds annual meetings since 2017.

The economics of marriage includes the economic analysis of household formation and break up, of production and distribution decisions within the household. It is closely related to the law and economics of marriages and households. Grossbard-Shechtman identifies three approaches to the subject: the Marxist approach, the neo-classical approach and the game theoretic approaches. Marital status has a positive influence on economic status. There is a marriage prime for males that the wage of married males is 15% higher than the wage of never married male. The Uniform Marital Property Act issued clause on the distribution of marital property and individual property. The Uniform Premarital Agreements Act offers clauses to guide two spouses to make an agreement on distribution of rights and obligations before marriage.

<span class="mw-page-title-main">Reproductive labor</span> Type of domestic labor

Reproductive labor or work is often associated with care giving and domestic housework roles including cleaning, cooking, child care, and the unpaid domestic labor force. The term has taken on a role in feminist philosophy and discourse as a way of calling attention to how women in particular are assigned to the domestic sphere, where the labor is reproductive and thus uncompensated and unrecognized in a capitalist system. These theories have evolved as a parallel of histories focusing on the entrance of women into the labor force in the 1970s, providing an intersectionalist approach that recognizes that women have been a part of the labor force since before their incorporation into mainstream industry if reproductive labor is considered.

<span class="mw-page-title-main">Doux commerce</span>

Doux commerce is a concept originating from the Age of Enlightenment stating that commerce tends to civilize people, making them less likely to resort to violent or irrational behaviors. This theory has also been referred to as commercial republicanism.

References

  1. ↑ Folbre, Nancy; Wolf, Douglas (2013). "The Intergenerational Welfare State". Population and Development Review. 38: 36–51. doi:10.1111/j.1728-4457.2013.00550.x.
  2. ↑ "The Feminine Economy and Economic Man. - Free Online Library". www.thefreelibrary.com. Retrieved 2022-10-26.
  3. ↑ Burggraf, Shirley (1997). The Feminine Economy and Economic Man: Reviving the Role of the Family in the Postindustrial Age (Updated ed.). Reading, Massachusetts: Addison-Wesley. ISBN   978-0738200361.
  4. ↑ Ball, Debra A.; Periard (Winter 1996). "Book Reviews". Michigan Family Review. 02 (2): 111. doi:10.3998/mfr.4919087.0002.210. hdl:2027/spo.4919087.0002.210. ISSN   1558-7258.{{cite journal}}: CS1 maint: multiple names: authors list (link)
  5. ↑ Peterson, Janice; Lewis, Margaret (2001). The Elgar Companion to Feminist Economics. Cheltenham, UK: Edward Elgar Publishing. p. 52. ISBN   1843768682 . Retrieved June 4, 2015.
  6. ↑ "Learn About Retirement Benefits | SSA". www.ssa.gov. Retrieved 2022-10-25.
  7. 1 2 "Splitsville". archive.nytimes.com. Retrieved 2022-10-25.
  8. ↑ Tice, D. J. "OPINION EXCHANGE | Making parenting pay again: Of leave policy and social trends". Star Tribune. Retrieved 2022-10-26.
  9. ↑ Goodwin, Neva (2005). "The limitations of markets: Background essay". mpra.ub.uni-muenchen.de. Retrieved 2022-10-26.
  10. ↑ King, Mary C. (1998). "Review of The Feminine Economy and Economic Man: Reviving the Role of Family in the Post-Industrial Age". Eastern Economic Journal. 24 (3): 376–378. ISSN   0094-5056. JSTOR   40325882.
  11. ↑ Hughes, James W.; Seneca, Joseph J. (1999). America's Demographic Tapestry: Baseline for the New Millennium. Rutgers University Press. ISBN   978-0-8135-2647-8.
  12. ↑ Grossbard-Shechtman, Shoshana (1998-07-01). "The Feminine Economy and Economic Man". The Journal of Socio-Economics. 27 (4): 573–575. doi:10.1016/S1053-5357(98)80009-7.
  13. ↑ Wax, Amy (1999-01-01). "Is There a Caring Crisis?". Yale Journal on Regulation.
  14. ↑ "Sun Journal - Google News Archive Search". news.google.com. Retrieved 2022-10-25.
  15. ↑ Wolf, Douglas A.; Lee, Ronald D.; Miller, Timothy; Donehower, Gretchen; Genest, Alexandre (2011). "Fiscal Externalities of Becoming a Parent". Population and Development Review. 37 (2): 241–266. doi:10.1111/j.1728-4457.2011.00410.x. ISSN   0098-7921. PMC   3134288 . PMID   21760651.
  16. ↑ "WHAT IS A HOMEMAKER'S WORTH TO SOCIETY? NOT MUCH". Chicago Tribune. 30 January 1997. Retrieved 2022-10-25.
  17. ↑ Lewis, Margaret; Peterson, Janice (2012). The Elgar companion to feminist economics. Edward Elgar. ISBN   978-1-84972-370-1. OCLC   858902372.
  18. ↑ Grossbard-Shechtman, Shoshana A. (2003). Marriage and the economy theory and evidence from advanced industrial societies. Cambridge University Press. ISBN   0-521-89143-4. OCLC   1097150004.
  19. ↑ Grossbard-Shechtman, Shoshana (April 28, 2003). Marriage and the Economy: Theory and Evidence from Advanced Industrial Societies. Cambridge, UK: Cambridge University Press. p. 336. ISBN   0521814545 . Retrieved June 4, 2015.
  20. ↑ Murray, Stephanie H. (2021-10-03). "The Social Security Trap". The Atlantic. Retrieved 2022-10-25.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.