HomeWorking Mothersmicroecon question about labor markets?
Posted in Working Mothers on 24th February 2012

microecon question about labor markets?
A mother has been killed in a car accident, and her family is suing the other driver for damages. The defense has put together a report that says “the implicit wage of mothering is $ 25 per hour. Mothering takes 9 hours per day, and so the value of a mother is $ 225 per day.” Suppose the court has accepted the hourly wage and hours of work. They’re also accepted that this sufficiently covers the good “mothering”. The mother’s family feels there is still something missing and that their mother was worth more than the sum calculated. What is missing? Why is $ 225 an underestimate.

any explanations would help, thanks.

Best answer(s):

Answer by Eddie
The mother likely had an effect on the value of the others in the family, such that she had a positive externality, or positive benefit, that was not represented in her wage.

They lose not only the domestic product she made, but they lost the effect of her on other family members (which can be translated into $ $ $ for court).

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