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I've thought about this a lot, though if you google around you'll find people who dispute this claim. Still, it makes sense to me. If you have single income ho

by shados 5y ago

I've thought about this a lot, though if you google around you'll find people who dispute this claim. Still, it makes sense to me. If you have single income households, and all of a sudden everyone's a double income households, you're not any better off. You'll get inflation, especially in housing. People will point out that stay at home moms weren't THAT pervasive, even decades ago (not as pervasive as us younglins would think), and that may be correct, but double professionals as a common thing is still more recent. We're making some (slow) progress toward wage equity on top of all of it too. That's a good thing, but it doesn't change much when people are bidding against each other. But all things are not equal: It's not as simple as "back then it was 1 income families against 1 income families and now its 2 vs 2". Not at all! Now you have 1 income families, 2 income families, 2 income families with no kids, 2 income families where both are software engineers, etc. All of these always existed in some form, but now it's very visible. If my partner and I (we're DINKs, both in software engineering and highly successful) go to bid on a home, and a single working parent with a partner who stay at home, and 3 kids, try to outbid us... Well, let's hope for them that the single earner is a world famous neurosurgeon, else they're not getting that home.

fancifalmanima 5y ago
I'm not going to say that the larger number of women entering the work force has had no effect on home prices, however even if it did it's not necessarily a net negative. A larger workforce leads to more economic output, more innovation (there are countless innovations that have probably failed to be made over the generations due to the impact of women not working) that leads to quality of life improvements, productivity improvements, price drops, and other improvements. Food as a percentage of income has dropped dramatically over the years. Same with technologies like computers and home appliances. Houses are also way bigger than they were decades ago. I live in a 2 income house with a kid, I'm not sure that the alternative (considering the economy as a whole and not just home prices) is actually preferable. It's also probably pretty difficult to disentangle the effect on home prices from more women working from the effect on home prices from other things like low interest rates. There's likely not a single cause for this, but rather an outcome of some aggregate of causes. It's entirely possible that more women working does increase home prices some, but that it's only some fraction of the overall increase we've seen, and that families come out ahead on this economically by a wide margin. Especially taking into account the aggregate effect a larger labor force has on output and productivity.
- shados 5y ago
  It's definitely not a negative and I'd pick a fight if I met someone face to face who said it was. I 100% agree with all of the benefits you outlined, and totally believe it's worth it. I'd also not focus too much on the "women entering the work force", because that's only one part of it, and not even the biggest part. More families not having kids, fewer families supporting their parents, more complex family structures in general, etc all impact it. I also don't think it has a significant impact on home price. After all, when accounting for inflation and interest rates, home price is not up by that much. Depending which periods you compare it to, it may even have gone down. What it changes, is the dynamics of bidding wars in low supply areas, which is a lot more specific, and is generally what people talk about on social medias. The whole "Omg this home went 100k over asking!" shock factor. Again, adjusted home prices didn't go up that much at the median. It's specific homes in specific areas that are skyrocketing. There's not many alternatives beyond increasing supply. I always like to contrast it with raising the level cap in an MMORPG. Everyone who quickly maxes their level after an update is back to square 1, all being the same. But the person who just started playing is at a huge disadvantage. It may be specific, but for readers familiar with Final Fantasy 14, if you start the game fresh today, you're in for hundreds of hours of catching up...It's very similar to the economic situation we're discussing.
- FooBarBizBazz 5y ago
  > A larger workforce leads to more economic output, more innovation (there are countless innovations that have probably failed to be made over the generations due to the impact of women not working) that leads to quality of life improvements, productivity improvements, price drops, and other improvements. You're thinking too short term. This logic does not work for more than one human generation. Say you're playing Civilization. I give you a button in the "change civics" category. You click it, and two things happen: 1. You double the number of professionals in all cities, as a factor of your total population. 2. Your population growth rate goes from strongly positive to slightly negative. Do you click the button? Let's make the numbers easier: If you don't click the button, you have a 2x growth rate per generation, and if you do click the button you have a 1x growth rate, i.e. perfectly balanced replacement. Well when happens if you click the button? You get ahead for one generation. But your opponent catches up in the next generation. And in the generation after that, they have 4x the population and therefore 2x the professionals. Before long they're outproducing you on every dimension.
whimsicalism 5y ago
> If you have single income households, and all of a sudden everyone's a double income households, you're not any better off. You'll get inflation, especially in housing. ?? The growth in output would offset the increase in dollars bidding for the same goods - ie. more people working would mean more supply and also more $$ bidding for goods. Seems absurd to say "you're not any better off."
- shados 5y ago
  Yes, thats why median home prices didn't really go up that much higher than inflation when adjusted for interest rate decreases. People don't want "a home". They want THAT home (or at least, a home in THAT area). Yes, there are supply issues because of zoning and NIMBY policies, but even super dense areas like Manhattan have significant supply issues. So you have income increases that can't be offset by the output, because supply is limited.
- imtringued 5y ago
  It makes constructing high quality housing more affordable but it also makes land more expensive.

by shados 5y ago

fancifalmanima 5y ago

I'm not going to say that the larger number of women entering the work force has had no effect on home prices, however even if it did it's not necessarily a net negative. A larger workforce leads to more economic output, more innovation (there are countless innovations that have probably failed to be made over the generations due to the impact of women not working) that leads to quality of life improvements, productivity improvements, price drops, and other improvements. Food as a percentage of income has dropped dramatically over the years. Same with technologies like computers and home appliances. Houses are also way bigger than they were decades ago. I live in a 2 income house with a kid, I'm not sure that the alternative (considering the economy as a whole and not just home prices) is actually preferable. It's also probably pretty difficult to disentangle the effect on home prices from more women working from the effect on home prices from other things like low interest rates. There's likely not a single cause for this, but rather an outcome of some aggregate of causes. It's entirely possible that more women working does increase home prices some, but that it's only some fraction of the overall increase we've seen, and that families come out ahead on this economically by a wide margin. Especially taking into account the aggregate effect a larger labor force has on output and productivity.

shados 5y ago
It's definitely not a negative and I'd pick a fight if I met someone face to face who said it was. I 100% agree with all of the benefits you outlined, and totally believe it's worth it. I'd also not focus too much on the "women entering the work force", because that's only one part of it, and not even the biggest part. More families not having kids, fewer families supporting their parents, more complex family structures in general, etc all impact it. I also don't think it has a significant impact on home price. After all, when accounting for inflation and interest rates, home price is not up by that much. Depending which periods you compare it to, it may even have gone down. What it changes, is the dynamics of bidding wars in low supply areas, which is a lot more specific, and is generally what people talk about on social medias. The whole "Omg this home went 100k over asking!" shock factor. Again, adjusted home prices didn't go up that much at the median. It's specific homes in specific areas that are skyrocketing. There's not many alternatives beyond increasing supply. I always like to contrast it with raising the level cap in an MMORPG. Everyone who quickly maxes their level after an update is back to square 1, all being the same. But the person who just started playing is at a huge disadvantage. It may be specific, but for readers familiar with Final Fantasy 14, if you start the game fresh today, you're in for hundreds of hours of catching up...It's very similar to the economic situation we're discussing.
FooBarBizBazz 5y ago
> A larger workforce leads to more economic output, more innovation (there are countless innovations that have probably failed to be made over the generations due to the impact of women not working) that leads to quality of life improvements, productivity improvements, price drops, and other improvements. You're thinking too short term. This logic does not work for more than one human generation. Say you're playing Civilization. I give you a button in the "change civics" category. You click it, and two things happen: 1. You double the number of professionals in all cities, as a factor of your total population. 2. Your population growth rate goes from strongly positive to slightly negative. Do you click the button? Let's make the numbers easier: If you don't click the button, you have a 2x growth rate per generation, and if you do click the button you have a 1x growth rate, i.e. perfectly balanced replacement. Well when happens if you click the button? You get ahead for one generation. But your opponent catches up in the next generation. And in the generation after that, they have 4x the population and therefore 2x the professionals. Before long they're outproducing you on every dimension.

whimsicalism 5y ago

> If you have single income households, and all of a sudden everyone's a double income households, you're not any better off. You'll get inflation, especially in housing. ?? The growth in output would offset the increase in dollars bidding for the same goods - ie. more people working would mean more supply and also more $$ bidding for goods. Seems absurd to say "you're not any better off."

shados 5y ago
Yes, thats why median home prices didn't really go up that much higher than inflation when adjusted for interest rate decreases. People don't want "a home". They want THAT home (or at least, a home in THAT area). Yes, there are supply issues because of zoning and NIMBY policies, but even super dense areas like Manhattan have significant supply issues. So you have income increases that can't be offset by the output, because supply is limited.
imtringued 5y ago
It makes constructing high quality housing more affordable but it also makes land more expensive.