Article Contentsp. 1p. 2p. 3p. 4p. 5p. 6p. 7p. 8p. 9p. 10p. 11p. 12p. 13p. 14p. 15p. 16p. 17p. 18Issue Table of ContentsJournal of Law and Economics, Vol. 31, No. 1 (Apr., 1988), pp. 1-264Front MatterThe Family and the State [pp. 1 - 18]Prisoners and Property Rights [pp. 19 - 46]Price Adjustment in Long-Term Contracts: The Case of Coal [pp. 47 - 83]A Study of the Regulatory Effect of the Employee Retirement Income Security Act [pp. 85 - 125]Regulatory Treatment of Abandoned Property: Incentive Effects and Policy Issues [pp. 127 - 144]Effects of Alcoholic Beverage Prices and Legal Drinking Ages on Youth Alcohol Use [pp. 145 - 171]Sources of Economic Rent in the Deregulated Airline Industry [pp. 173 - 202]Capital Turnover and Marketable Pollution Rights [pp. 203 - 226]Property Rights, Progress, and the Aircraft Patent Agreement [pp. 227 - 248]Uncertainty, Efficiency, and the Brokerage Industry [pp. 249 - 263]Back Matter [pp. 264 - 264]The University of ChicagoThe Booth School of Business of the University of ChicagoThe University of Chicago Law SchoolThe Family and the StateAuthor(s): Gary S. Becker and Kevin M. MurphyReviewed work(s):Source: Journal of Law and Economics, Vol. 31, No. 1 (Apr., 1988), pp. 1-18Published by: The University of Chicago Press for The Booth School of Business of the University of Chicagoand The University of Chicago Law SchoolStable URL: http://www.jstor.org/stable/725451 .Accessed: 21/01/2013 21:44Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp .JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected]. .The University of Chicago Press, The University of Chicago, The Booth School of Business of the University ofChicago, The University of Chicago Law School are collaborating with JSTOR to digitize, preserve and extendaccess to Journal of Law and Economics.http://www.jstor.org This content downloaded on Mon, 21 Jan 2013 21:44:31 PMAll use subject to JSTOR Terms and ConditionsTHE FAMILY AND THE STATE* GARY S. BECKER and KEVIN M. MURPHY University of Chicago and National Opinion Research Center I. INTRODUCTION C HILDREN are incapable of caring for themselves during many years of physical and mental maturation. Since their mental development is not sufficient to trust any contractual arrangements they may reach with caretakers, laws and social norms regulate the production and rearing of children. Laws punish child abuse, the sale of children, and unauthorized abortions. They provide compulsory schooling, welfare payments to families with dependent children, stringent rules about divorce when young children are involved, and minimum ages of marriage. Trades and contracts are efficient if no deviation from the terms would raise the welfare of all participants. An alternative criterion for efficiency is that the monetary gains to those benefiting from a deviation do not exceed the monetary loss to those harmed. Unfortunately, the immaturity of children sometimes precludes efficient arrangements between children and parents or others responsible for child care. This difficulty in establishing efficient relations within families provides the point of departure for our interpretation of the heavy state involve- ment in the family. We believe that a surprising number of state interven- tions mimic the agreements that would occur if children were capable of arranging for their care. Stated differently, our belief is that many regula- tions of the family improve the efficiency of family activities. To be sure, these regulations raise the welfare of children, but they also raise the welfare of parents, or at least they raise the combined welfare of parents and children. * This is the ninth Henry Simons Lecture, delivered by Becker to the University of Chicago Law School on February 25, 1987. We received valuable research assistance from Michael Gibbs and insightful comments on an earlier draft from David Friedman, Richard Posner, and Sam Preston. Our research was supported by National Science Foundation grant SES-8520258 and by National Institute of Child Health and Human Development grant SSP 1 R37 HD22054. [Journal of Law & Economics, vol. XXXI (April 1988)] ? 1988 by The University of Chicago. All rights reserved. 0022-2186/88/3101-0001$01.50 1 This content downloaded on Mon, 21 Jan 2013 21:44:31 PMAll use subject to JSTOR Terms and ConditionsTHE JOURNAL OF LAW AND ECONOMICS The efficiency perspective implies that the state is concerned with jus- tice for children, if "justice" is identified with the well-being of children, for their well-being is the prime factor in our analysis. The efficiency perspective does not imply, however, that the effect on children alone determines whether the state intervenes. The effect on parents is consid- ered too. The state tends to intervene when both gain or when the gain to children exceeds the loss to their parents. According to Richard Posner and others, the common law also im- proves efficiency when transaction costs are large. Richard Posner says, "In settings where the cost of allocating resources by voluntary market transactions is prohibitively high-where, in other words, market trans- actions are infeasible-the common law prices behavior in such a way as to mimic the market."' We cannot prove that efficiency guides state involvement in the family. We will show, however, that state interventions in the market for school- ing, the provision of old-age pensions, and access to divorce are consis- tent on the whole with the efficiency perspective. The modern theory of regulation and public choice questions whether much government activity encourages efficiency and justice. Section VII sketches an analysis of interest-group behavior that can lead to govern- ment intervention to promote efficient family arrangements. In order to interpret public policies, we develop an analysis of family behavior under different circumstances. The analysis greatly extends ear- lier work by Becker. His Woytinsky Lecture of more than twenty years ago shows that only parents who give their adult children gifts or bequests make optimal investments in