I had an offline discussion with Matt Yglesias that prompts this critique of Bryan Caplan’s basic thesis. Bryan seem to be saying – I haven’t read the book though I have followed his discussion of the idea for years – that knowing that your kids future isn’t dependent on you doing everything just right should make you want to have more.
What is it about downward sloping demand that you disagree with, I think I have heard Bryan say.
Well lets look at a more complete model where the demand for kids is itself a function of your control over what your kids will become and what Bryan is really talking about is the marginal cost curve for raising kids.
Lets build an ultra simple framework where you have only two models you can ascribe to. In the first model your parental efforts influence what type of kids you wind up with and you always want to set effort to HIGH. In the second model your parental efforts don’t matter and you always want to set effort to LOW.
The supply and demand in these two cases look might like this
How plausible is this? Well, perhaps not implausible at all if kids are a status marker. If a big part of what modern upper-middle class parents get from their kids is bragging rights then a full acceptance of Bryan’s thesis might decimate their demand.
In this vision of the world kids are just one more area where driven parents get to “win.” If they do all the right things then they can show off how much better their kids are than the neighbors. Yet, what if there is no winning? What if kids just are who they are?
Then even if the cost is lower the net benefit for competitive parents might collapse. I’ve drawn smooth supply and demand curves but this is for the aggregated market. In reality we would imagine a lot more parents defaulting to zero once they know that there is no status gain to be had from their kids.
Note that this might be a happy story. Consumer surplus increases because parental effort collapses. The parents are better off knowing that what they do won’t matter. Yet, it doesn’t make them want to have more kids.