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.
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Saturday ~ April 30th, 2011 at 3:00 pm
Eric Crampton
Well, I get minor jollies thinking how much better our genes are given child quality…
Saturday ~ April 30th, 2011 at 6:41 pm
buddyglass
This is cynical, but one way to look at children is as insurance. Each of us has the ability to produce additional human beings who, if all goes well, are extremely willing to make financial sacrifice on our behalf. If you have eight kids then run out of money when you’re old, it’s extremely unlikely you’ll be out on the street.
Obviously there’s an opportunity cost, both in time and money, but I tend to think the financial estimates for the “cost” of raising a child to adulthood are exaggerated.
Saturday ~ April 30th, 2011 at 7:11 pm
Andy Harless
Here’s another argument that tends to the same conclusion. Suppose a casino increases the number of decks that they use at their black jack tables. Does that make you more or less willing to play there? Apparently, Bryan would say, “Oh, great, if they have more decks, that means counting cards won’t affect my odds of winning, so I save the expense of having to count the cards. Let’s go!” I’m guessing, though, that that’s not how a typical black jack player would react.
Perhaps Bryan is assuming that the distribution of gross payoffs from having kids is bounded below from zero, in which case reducing the effort required will clearly increase the expected net payoff. One can certainly construct examples that obviously violate that assumption, but perhaps he thinks it’s close enough for practical purposes. I don’t. I submit that the gross unconditional distribution of gross payoffs from having kids may not even have a positive mean, and that perhaps the only reason people choose to have kids is because they believe that, conditional on their intended level of effort, the mean will be positive (and high enough to justify the effort). Show them the twin studies, and they will realize that there is no way to beat the house in the long run.
Saturday ~ April 30th, 2011 at 9:54 pm
todd
Is parental regret/satisfaction with the decision to have kids dependent upon their beliefs regarding the efficacy of nurture? Do high status parents care more abor less about status? Who is more apt to ne disappointed in their child?