Power Couples

Town and Country

I am sitting on an old style white chalked brick veranda with a sweeping view of expansive forests and rolling hills. The woodlands cover about five times the area of the settlements in their midst. I grew up here, so although I cannot see the detail of the boscage from where I sit, I know it to harbor fir, spruce, white oak, maple, beeches and birches. On a warm humid day with wind you can smell the spruce. And with the hindsight of economic studies, I recognize the region to host a wood cluster, from forestry along the value chain of industrial and fine carpentry and about any wood product a house may need. Some of the unpretentious medium sized manufacturers are world market leaders for a random product, like a kind of wood siding, or window caulking. Social networks in the small towns are dense, it is easy to know everyone living in the region, at least a little.

When I left this peaceful place for the first time to live in a big city, one of the things that struck me was the anonymity that reigns once you hit the million person mark. Every day you meet people and families that your parents or other kin did not know before. You have to actively build up a stock of knowledge about them, and several people may not have ‘a reputation’ of some sort because the turnover of interactions is so fast and fluid.
At the same time, the amount of opportunities and choice are wonderful. In the city I moved to, you had a bus for every destination you wanted to get to, a course for any subject you wanted to learn. Out of the 6m inhabitants, you had a pool of at least 1m you could interact with and recruit friends from. It was easy to match preferences, from classical music over poetry to spiritual brand. Sports, music and any other hobby could be practiced at near olympic standards. (And the city we are talking about is Bogota, not Boston. In the 1990s. Just for the record.)

The variety of jobs people did was diverse too. In addition to teachers and doctors, I met salesmen, bankers, engineers, painters, entrepreneurs in retail, textile manufacturing, forwarding and furniture design, employees and managers of multinationals. I could make out a couple of clusters touching the city: the beverage industry, furniture and jewelry design, pharma and cosmetics. Professional activities mingled and overlapped and moving from one to another was a more obvious and more frequent choice than in my original forestial dwelling.

Love in the City

Which surroundings are best for your dating? It depends. As people couple up, they think about compatibility. This includes natural affinity, values and preferences, but it also includes very practical matters. Such as, will both partners work, and where will they work. The industrially more diverse metropolitan environment is likely to hold more options for either half of the couple. If both partners want to work, they will be more able to do that in the city rather than in the country. They are also more likely to find a better job match in the city. I.e. the more demanding and peculiar they are about what they want to do, the more they will benefit from the better odds in the city of actually finding it. In principle.

Dora Costa and Matthew Kahn mined valuable data from the US and corroborated this story in the Quarterly Journal of Economics (Nov 2000). Between 1940 and 1990, the college educated drifted increasingly to cities, and the biggest driver of this drift was the emergence of Dual Earner couples. By far. Husband AND wife started to work, and career minded people increasingly mated with career minded people. (As for why this suddenly happened, see my previous post Opposites Distract.)
This does not mean there are no power couples in the countryside, but if you look closely you will realize they are far fewer. And mostly covering the essential services: medicine, teaching, pharmacy, religion. Unless both partners happen to specialize in the particular local industry.

The emergence of dual earners is a sign of greater equality in couples. But the process of their concentration in cities helps create spaces of two speeds. By attracting qualified people more easily, cities will thrive more. While the countryside suffers brain drain. Over time, town and country may drift apart in productivity and wealth.

Digital Desegregation

However, let’s not forget that this is 2016. The spatial segregation I describe above applies to jobs that are geographically bound, that need a specific place of work and personal presence. This requirement is fading in many industries. Digital jobs like programmer and web designer can be done from any place with an internet connection, and so can many back- and sometimes front office jobs in finance, medicine and retail. Presence jobs in fields as diverse as diplomacy, engineering and science have phases that can be covered effectively and (more) efficiently through telework.

And this is why I can sit on this white veranda and enjoy the clean air and the view of the forests in the evening sun. My blog will soon be posted to the internet, visible in town and country alike. And my man is sitting next door and writing his own.

(Second) Spring, Fertility and Happiness

Despite the ever changing weather, I hear birds chirping outside. Beams of sunlight come and go, as do bees that are kept at the local elementary. The daffodils have not given in to the rain and the mosquitoes have not arrived yet. Perfect spring. New green life is piercing through frosty soil, and a somehow larger family of Easter bunnies gathers on our lawn. A good moment to think about how human families form and grow and pursue happiness. I have witnessed this lifecycle building best in my immediate friends, such as Beth (not her real name).

Beth has been married for over ten years now. She confided to me that her wellbeing had changed markedly since she first partnered with Jack. Getting married and moving in together nudged up her happiness. Trying for a child and getting pregnant brought an even deeper contentment and feeling of security, also for Jack. The actual birth of the first baby was life changing and laborious. But at the same time deeply rewarding and instilling pride. Beth and Jack felt like family. Both of them older than 36, they also saw a long held wish materialize, and at a time where their biological clock could have decided otherwise. In spite of the hard work that followed and would eat up part of their leisure for good, they were happy.

Mikko Myrskylä und Rachel Margolis mined the extensive data from British and German household panels and found that the birth of a child normally increases the parents’ happiness. This is strongest for the first child and a bit milder for the second (and non-positive for the third). The effect is temporarily very strong. As they write, “happiness is, on average, 0.3-0.5 units higher (on 0-10 scale) when a child is born compared to the baseline 4-5 years earlier. This magnitude is comparable to the effect of divorce (-0.49) or going to from employed to unemployed (-0.47).”

Happiness gets a boost around the birth of a child, with 2-3 years anticipation before the birth and lasting 1-2 years thereafter. The happiness increasing period before birth may reflect partnering, marriage and getting pregnant; and the post birth decline possibly a realization of the permanent loss of spare time.

And, wait for it. You better have your kids at a mature age. Older parents, above 35, as well as the highly educated have a stronger happiness surge, and even when happiness drops around 2 years after the birth, it still stays above the long term average. So for these groups, parenthood increases their happiness sustainably. Younger parents (below 25) can see their happiness decline long term. This may reflect that younger parents typically have fewer resources available, and also that they still have a – now unfulfilled – need to enjoy life and leisure on their own. Older parents likely have had their partying years and can let them go.

Looking at all this it is understandable that more and more people decide to have their children later, and to limit their number. Parenthood in the second springtime of life lets the new happiness last.

Memento mori

“Memento mori – remember you are mortal.” This is really not big news, all our lives will end. But we are most of the time too good at ignoring it.

See, I have to write about death and mortality today because I am seeing too much of it. The Brussels and Ivory Coast hate attacks, people surprised by a diagnosis of terminal illness, young top-of-the-crop talents taking their own lives, car accidents, and again, diverse health struggles lost, heroically. Always untimely. Sorry for not coming up with a more uplifting topic, but bear with me. Because first, it is Good Friday and death is for a while the theme, and second, because by the end of this blog, I will try to extract some beauty from the setting. Somewhere.

Likely, none of us knows for when God has ordered the taxi, or who the driver is. And we repress thoughts about it successfully. We live as if we live forever. We love as if our relationship will last forever and beyond. It is easy to value today as if we had lots more of them coming, and value it barely more highly than tomorrow. Economists call this intertemporal preferences, or discount rate. For example, with a low rate we don’t discount the future strongly because we are convinced we have lots left. Or we are good at waiting. There are advantages to a low personal discount rate, such as willingness to save, invest, delay gratification, to work hard today for a better tomorrow. Most education aims at instilling these values in children.

But they may not be entirely realistic. In the long run, we are all dead, as Keynes wisely observed. We live moving towards death.
Some people get the news about God’s taxi, its driver and the approximate departure years in advance. It is still shocking news. It changes one’s outlook completely, and often quite painfully. Arguably the more painfully, the less prepared one is. There is a sudden realization of the strength of the will to live. An anger with fate or a higher power, sometimes turning one’s faith bitter. And the fear that the driver may be really unpleasant. And of the radical good-byes. (Radical, but not terminal, I believe.)
Even when the taxi is announced at a point in life that one could consider rich in years, and fulfilled, more often than not it pulls the emotional rug from under people.

My lesson from observing this is to get prepared. To live life, love, friendships, faith and work knowing the road will once end. To cherish every day, to worry a little less, to breathe more deeply, to savor food more, to spend more time with your kids, to give more and hoard less, to hold on to good memories and let go of grudges, to care for one’s time wisely and abstain from things, people and situations that drag.
To take liberties and forget others’ approval. To indulge all those who don’t know this. Simply, to put things into perspective. Many annoyances lose their weight in front of the fact that our stay on earth has an expiry date.

It is still fine to work hard and invest in tomorrow. But it is wiser to plant Lutheran apple trees and take joy in the planting rather than doing it only for the harvest. The apples may well be our offspring’s to enjoy without us, which is also worth it.

The Growth Mindset for Relationships

These days, The Growth Mindset is all the rage as a recipe for success, and for raising successful children. What does it mean?

A Growth Mindset, as discovered by Stanford professor Carol Dweck, is the inner belief that intelligence and talents can grow by effort. A Growth mindset lived out in practice means attributing successes and failures to one’s actions and effort rather than one’s fixed abilities. The opposite would be a fixed mindset.  In education, it means praising children for effort rather than ability such as smartness. A child that is praised for effort will invest in effort. A child that is praised for smartness will stagnate and rely on existing abilities only.

What use is this for relationships? Well, I would like to think that a Growth mindset can be applied to about everything. For example, to the extent to which partners are well suited to each other. A fixed mindset would take this as given, a  growth mindset would believe that a couple can be well matched today and better matched tomorrow. Personal affinity can grow. So can closeness.

On a sidebar, shhh, it can be a good way to influence your spouse. Praising his or her efforts…

For now, this is all theory. I challenge economists and other empirical researchers to test the effect of a growth mindset on relationships. Let me know what you found.

 

Happy Halloween – Why A Little Thrill Is Good For your Love Life

In the early 70s (probably bored by the first oil price crisis) psychologists Donald Dutton and Arthur Aron conducted a series of experiments. First, they sent a group of men down a rickety, wobbly bridge across a scary river. On the bridge, a woman asked them to complete a projective test that involves making up narratives about ambiguous pictures. A similar group of men was sent across a safe and sturdy bridge across a small creek and presented with the same test.

Guess what. The men who experienced the scary bridge produced narratives that were much richer in sexual content than the men on the safe bridge. Also, they called the female researcher back much more often (9 out of 18 vs. 2 out of 16 men). The results were corroborated in a laboratory setting with scary shocks, where the men anticipating shocks produced more sexual narratives and reported being more attracted to a female also present.

Hm. It looks like our hearts and minds are not very good at distinguishing where flutters and butterflies come from. Scary can mean hot. The nearest potential partner becomes more attractive. Feelings get a boo – st.

What can we do with this? Well, as wobbly bridges are rare these days, I would advocate you ride a roller coaster with your love at least once a month. And take advantage of the current season: check out the neighborhood’s scariest displays. No dodging the haunted houses…

‘Darling, I don’t have time’. – Dating in the times of Piketty , part III

I have already speculated about the trends that Thomas Piketty is foreseeing, here and here. More precisely, about their impact on our private and love lives.
It does not look good.
But several of the things I am gloomily musing will come from the inequality gap opening will unfold gradually, slowly. They will probably take a bit of time to manifest themselves globally.

Here’s a third impact that we are already feeling.

Couples today spend an average of two and a half hours a day together, including on weekends, according to a time use survey from the UK. And what do we do when we’re alone with our loved ones? Watch TV (one third of all the time spent together), eat (30 minutes) and do housework together (24 minutes). Ouch. We don’t have time to date. If we have a relationship, we don’t have time for it. And we fill the time together with must do-s or a complete intellectual switch-off (TV).

What does that have to do with Piketty’s findings. Let’s see.
The global wage bill is shrinking. This is one result of capital harvesting more of the available growth returns than labor. It means people need to work more to make ends meet. The self employed need more hours, part timers need to go full time, potential retirees need to keep working. What about those on a fixed salary, where hours’ relationship to salary is not straightforward?

Here a second time trend is relevant and interacts with Piketty’s predictions. Unionization is decreasing. Employers are gaining in relative power. They have an incentive to widen working hours beyond what is contractually agreed. And some people feel obliged to do this on their own, setting new (non-contractual) standards for all. This latter one is already happening and has been happening for a while, across the economy. Do you know anyone that works the 45 hours stated in their contract? I struggle to think of a single one. Everyone works more. It has been so ingrained in the culture that it makes people smile if you think aloud about it. Your commuting time is your leisure, even if you are on a device for work. Should it be?

Our hope is that the millenials will take the role of unions and negotiate for good working hours. Arianna’s Thrive movement is also promising.

For the time being though, I am just watching and wondering.

About that Pay Gap….The Dark Side

I wrote previously about the gender pay gap, the difference of women’s and men’s earnings, here.

That’s enough of a dark side you may think. But trust me, it gets darker.

Admittedly, the current discussion of That Pay Gap in the media is taking place largely among fairly powerful women; women who earn well enough to sustain themselves and more. The headline grabbing lawsuits on that matter usually concern women in, or just one step away from, executive leadership in profitable corporations.

What does the situation look like at the margin of empowerment, and, at the margin of poverty? To start, let’s think about a fundamental difference between men and women that is a bit uncomfortable to consider: women, also very poor women, always have a currency to pay in. There is always one thing they can offer and it’s usually worth money. Do you see where I am going? There is a huge market out there for female straight sex, and such a market does not exist for male straight sex. I am not saying this is an advantage – right now in the world it does not play out as one.

This paper by Damien de Walque and others shows that conditional cash transfers can get men and women to lead healthier sex lives and reduce their risk of contracting HIV substantially. Once the cash transfer is taken away, the behavior change persists among men but not among women.

Ouch.

Here is what happens: when the money is lacking, women need to pay with sex. Riskier sex pays better. This is not a lifestyle choice; it is a survival necessity. Men cannot do this, on the one hand; and do not need to do it on the other: they likely earn more than women anyway.

At the margin of empowerment, the gender pay gap forces women to be more available for sex.

Three Theories About That Pay Gap

It is no news. Women, the world over, earn less than men. Some of the famous gender pay gap is due to women’s professional choices, and to baby breaks. But this paper by Gillian Paull shows that, even when you carefully account for baby breaks, education and sector (and more), there still is a gap left.

What. The heck. Is That Gap??

Theory Number 1

Women don’t negotiate – at all, or don’t negotiate well. Employers know this, and rationally, take advantage of it by paying less than they would to a man (who can be expected to negotiate). A lot of popular books look into this, and its potential remedies, like Know Your Value by Mika.

I am sure this explains part of it, but not all. How about

Theory Number 2

Women are not allowed to signal success. This one is my favorite, and the one of which I seem to have most anecdotal evidence. Time and again I see men recount their successes. Not offensively so, but certainly confidently, and always attributing success to their own achievements. Never, really never, have I seen a man in the workplace attribute his success to luck or fate. When women signal their own success, it provokes smirks, mockery, or criticism. Cohorts of middle management feel entitled if not right-out divinely called to chip away at that evil woman’s assertiveness.

The women in my sample have ended up with one of three results: (i) They stop signaling. Their assertiveness leaves them never to return, and they go on producing successes no one ever attributes to them. This is the most frequent outcome, which naturally also results in lower wages. (ii) They withdraw and leave jobs until they find an environment that is fairer in its assessment, or they create it themselves in a start-up. This is somewhat rarer and can take a long time. And the rarest outcome is that (iii) women stay where they are, put their chin up and face the criticism right on. Those that are successful with it sometimes have an older male supportive colleague that negotiates their fate like an old-testament dad would the future of his daughter.

Some women have looked through the dynamics of i-iii and made a conscious effort to stay at iii. Several of them are very senior.

Theory Number 3

Women do not know their value. And they don’t know that they don’t know it. The most striking example I read about is this one. In the world of fashion and fast cars, models and women with similar exceptional beauty attend VIP parties without charging for their presence, while the VIP ‘friend’ that brokered their attendance gets a juicy commission.

Before I write myself into a complete rage, let’s spend that energy on a solution.

# 1 Remedy

Wake up, and sisterize. What about the following strategy, ladies: (i) realize that in many situations you are not paid (enough) when you should be, (ii) act in solidarity with each other and enlist as many friends as possible when making your claim for higher pay. The good old fashioned trade unions have been shown to work some way towards reducing gender pay gaps. But even without formal unionization, an informal united front of women (let’s call it sisterization) that share information and claim payment at value should go a long way.

This takes the humble realization that we are replaceable. Whenever we are not, we can negotiate as monopolists. But when we are, it takes a sisterhood.

Holidays without A Better Half? – A 5-Step Survival Plan

I am not quite sure I should be writing this. After all, I am *everything but* without a better half. I have the world’s hunkiest husband, who is currently playing with two adorable little wild beasts on the corridor.
But, boy, do I remember how it was without him. In fact, it is a recurring nightmare that I have: being unmarried and having to decide among a bunch of unpalatable ex-es. These are nightmares that feel quite real. During the dream I genuinely forget that I am married. It’s scary and lonely. And the options look between dour and unfeasible. A group of friends and family that stand around, bewildered and without understanding, does not help.  – And then I wake up next to The Man and feel like singing Handel’s Alleluia, multi-voice.

In other words: dears, I know what I am talking about. Been there. You are not alone. From the vantage point of someone in safe haven, but with a good view of the ups and downs of single-hood, here comes my survival plan for your holidays:

1 – Read the biography of a great single man or woman. (There are MANY. Composers, writers, poets, politicians, successful entrepreneurs – each century has had a few, of both genders.) Take a step back from the couple focus.
2 – Promote this idea to your family: not everyone needs to have a partner. You may use evidence from the biography you are reading. (You don’t have to believe this yourself, but the real bunch that you want to take a step back is your family.)
3 – Focus on yourself. Pamper yourself, become yourself – just better. Train the muscles you’d wish you had, or the skill you’d like to have. Schedule a makeover with a pro, or a friend whose taste you trust. Beautify your best side.
4 – Be the person that is missing from another person’s life. This need not be ‘somebody’s partner’, but another helping hand at the family dinner, or with your cousin’s little wild kids, the community activities of the season, or in the places that lack staff during the holidays but are bitterly needed: hospitals, soup kitchens, hospices, nursery homes, orphanages. You will never know how much you are appreciated till you try.
5 – Number three and four should keep you busy already. But if you have some downtime left: dream. Sit down with yourself and make your personal wish list for the next year. Stick to a maximum of three wishes total if possible. If that includes a partner, work on it and be specific: what are his/her five non-negotiable traits. Promise yourself you won’t accept a second date with someone that does not meet them. After all, dating is about spending one’s time wisely and economically for best results. That’s called optimization.

Happy Holidays!

Love from your Economist.

Power, Commitment and Dating: 5 Lessons from Jean Tirole

Jean Tirole recently received the prize in memory of Alfred Nobel for Economics, for his work on firms’ market power. Understanding how his sharp insights translate into the world of dating took me considerable mulling over, although it now feels obvious upon hindsight.

You probably all remember a beau that casually dated many women at once, “stringing them along” without making up his mind on who he should become exclusive with. Or a woman that nourished many admirers’ hopes for a long time, without settling with any one, but also without letting any one of them pursue another woman. Such is the nature of power in the dating market. And Tirole’s insights are highly relevant (and make for wicked strategies, actually).

Here are five key lessons:

1. People with power in the dating market can effectively ward off competitors. For a description of what that might look like, see above, and dig in your high school memories.

2. You can tell commitments from non-commitments, even in a powerful person. True commitments are actions that are hard to reverse. For example, if she moves house to be near you, that would be a commitment. As would be a publicly announced engagement, or, of course, marriage. Declaring the relationship exclusive to close friends, and to any admirers or former dates probably also counts. However, spending time with you, being intimate, and/or being generous with you, is no commitment. It can be stopped at will.

3. Dating market power is hard to maintain. Warding off a competitor is costly; it will take time and effort to string along that one woman that is already turning her head towards someone else, or that one admirer that is about to give up.

4. But power can be broken. If put under the right kind of pressure, the monopolist beau or belle will behave as if powerless. If the above described effort to maintain power is altogether more painful than losing that person from one’s circle of influence so to speak, then the powerful dater will let his subject move on. So the trick is to push the boundaries: if you are the competitor, i.e. the dating market entrant that would like to snatch one worthy date from the circle around the beau, just keep the lady of your intentions as busy and entertained as you can. It needn’t be with dates; if you have other avenues to meet her or engage her along her interests, even without you being involved (sports clubs, work, volunteering, your friends etc), do so. Make sure the monopolist beau will have a hard time keeping up (or finding spare minutes in her calendar). If she is not his favorite, he will let go.

5. Building up that kind of dating power from scratch can be a ton of work. Obtaining uniqueness in the dating world, to the extent that one can exercise market power, is comparable to  investing until securing a patent. What could those investments look like in the dating world? Building up a network, organizing social events, fun activities and gatherings, attracting and hosting interesting conversations…are all activities that enhance popularity and thereby dating power. It might also help to hit the gym three times a week until in ship shape. In some cases Miss or Mr monopolist may have a huge advantage on these accounts; too huge for anyone to follow. If a potential follower fails to realize (aka be impressed by) the size of the task, a stiff competition can ensue and the leader effectively be leapfrogged. Ha!

No guarantees when you apply any of this in real life…