Loved Ones and Economic Shocks

This post is inspired by Fatima Farheen Mirza’s beautiful novel A Place for Us, which unpacks the lives of an Indian-American Muslim family in California. Each member of the family struggles in their own way with navigating their identity at the intersection of cultures and loyalties, at times clashing violently and at other times finding solace in each other. The central conflict is the inability of Amar, the youngest child and only boy, to feel a sense of belonging where he is born. His fall is a reminder that a comfortable material life cannot guarantee well-being and a fulfilled existence. A person’s community and how well they match with it matters for how happy they are, and it is not certain that economic growth and prosperity facilitate better matches.

Imagine that having loved ones matters a lot to a person’s well-being. Suppose there are two inputs to whether we love someone: our affinity for them, and how much time we spend with them. We develop loving relationships only by being around people who we are drawn to and spending enough time with them to connect emotionally. Neither of the inputs to a successful relationship can be purchased. There is only one resource we can use to foster loving relationships–our time. We can use our time to search for people who we might have an affinity with or to spend with potential loved ones in hopes of connecting more deeply.

Each person is endowed with a stock of potential loved ones when they are born: their family and the surrounding community. Suppose that similarity is a good predictor of affinity–we are more likely to feel a close connection to people who have similar personalities and life backgrounds. Then if the affinity between each pair of individuals is unknown beforehand, the endowment we are given at birth is arguably the most fortuitous possible one. We are matched with people who share our genes and our cultural context, which before our birth are the best predictors of similarity and affinity.

However, the quality of this endowment depends on the level of historical change. The lives of the people in our community do not have to be similar to our own. Suppose between the last generation’s birth and our own a major shock took place to the community. Shocks can be positive or negative. Perhaps our community experienced massive sudden economic growth, so our childhood is more comfortable than it was for the adults we grow up around. Alternatively, our community may have been involved in a devastating war before we were born, and we could be worse off than the past generation. Or perhaps we are the first generation to grow up in the internet age, and our community never previously experienced constant access to schoolmates or strangers on the web.

These shocks over time to the cultural context may reduce the affinity we have to the community we grow up in. To see this, instead imagine growing up centuries ago in a household of farmers. For many generations, our family has lived on the same plot of land and tilled the same fields. Our community has deeply ingrained cultural practices passed down for many years that everyone believes and adheres to. We all speak the same language and follow the same religion. No one thinks of leaving their birthplace to pursue opportunities elsewhere. In such a context, the quality of our endowment of relationships at birth must be quite high. The odds of finding people more similar in personality, ambition, and background are low.

In contrast, the intergenerational disruption in social conditions has been higher in recent centuries. Even the tools used by our community a generation ago (landlines, pagers, checkbooks, physical maps) are almost comically obsolete now. The way we speak, the way we play, and the education and occupation we choose for ourselves are all different. While our genes and upbringing still tie us to home, the people we feel most comfortable with may not be the ones who live near us.

A similar situation might hold for immigrant families and the way they experience and assimilate into a new cultural context. Zhou and Xiong (2005) discuss that second generation immigrants can try to adapt to their social environment in several different ways, including severing ethnic ties and adopting the dominant culture, adapting their native subculture in direct opposition to the dominant culture, or something in between. In the novel, none of these approaches quite works for Amar, leaving him isolated. Anecdotal evidence suggests such feelings may be common among second generation immigrants caught between cultures.

A lower quality endowment of relationships hurts us, and we have to face the tax in two ways in expectation. First, we have to invest time searching for people who have a high affinity with us and cultivating our relationships with them. Second, a lower quality endowment exposes us to more risk of not matching well with anyone. Perhaps we get unlucky, and all the acquaintances we come upon are not good fits for becoming loved ones. Maybe we were not quite born in the right time and place, and during our lives we fail to find people who we really love and care for and who return the feeling.

It is unclear whether economic growth helps remedy or exacerbates these problems. Growth can cause social disruption and be the source of a worsening endowment of acquaintances. Technological adoption, for instance, can erode intergenerational similarity. Further, unlike for material goods, economic growth does little to slacken our budget constraint for loving relationships–our time on earth stays relatively fixed. Life expectancies have been flat in developed countries in the past few decades, preventing us from looking indefinitely for people we match well with.

On the other hand, it may make it easier to find and keep in touch with people who have high affinity with us. For example, there is evidence online dating reduced search costs for romantic partners considerably. Technologies like messaging apps and Skype made it easier to talk to acquaintances who were far away, expanding the radius of people we might come to love. Still, it is uncertain how a lower quality endowment trades off against lower search costs in finding loved ones. Perhaps in the long run recommender systems will be so good that they can predict affinity even better than our natural endowment and match us with loved ones; it is not clear if or when that might happen, or whether it already has.

This is all to say that there is more to our well-being than economic growth, and the effect of systematic social change–even when driven by growing prosperity–on these other inputs to our happiness are not obvious. Growth and technological change enable greater heterogeneity in our attributes, making each of us more dissimilar and unique. While this freedom may be empowering, it could also make it harder for us to connect with each other.