Katherine - posted on 07/03/2011 ( 9 moms have responded )
Sorry, Bryan Caplan. You may think there’s a compelling economic argument for having a big family, but people aren’t buying it.
Literally. A column in the New York Times makes the case that children are what economists call “inferior goods”. The richer people become, the less of them they want. This is the opposite of most things. In general, the more resources you have, the more of something you want to acquire.
But there are some goods, “inferior goods”, that people buy less of as they become richer. Rice is the example given in the article. Once you can afford other food, you buy less rice.
Similarly, the wealthier a country or individual becomes, the fewer children they tend to have.
Economist Justin Wolfers started this discussion with a post on Freakonomics explaining why he thinks kids are “inferior goods”. Wolfers rounds up an impressive quantity of data from many sources, all showing the same thing: that the wealthier people become, the fewer kids they have. This is true even when the people in question don’t have access to modern contraceptive methods. Wolfers says:
In a related paper, Alice Schoonbroodt and Michele Tertilt say that, “There is overwhelming empirical evidence that fertility is negatively related to income in most countries at most times.” They are right. Whether you cut the data across countries, through time, or across people at a point in time, the same fact arises: The richer you get, the fewer kids you have.
Bryan Caplan’s argument is that kids needn’t be as resource intensive as many affluent families make them. They don’t really need as much undivided attention as parenting handbooks and popular opinion would have you think. A little TV time won’t break them. And all those baby yoga classes and private piano lessons are really optional.
Given that kids are cheaper than we think, Caplan argues that everyone should have more of them. And if children were “normal goods”, that’s how it would work: people with more resources would have more kids. You’d have as many kids as you could afford.
But Wolfer’s data shows just the opposite, that the rich want smaller families. One of the privileges of becoming affluent seems to be having fewer children and pouring more resources into each individual child.
That doesn’t mean kids are a bad thing. Just that they’re not a “normal good” that people simply want more and more of, like steak instead of rice. Instead, it looks like the data show that when people have sufficient control over their own circumstances and life choices, they choose to have fewer children.
But once people rise in affluence, they often choose not to buy more of something they like. My family has one car. We could afford two, but we don’t want another one. Ditto TV sets, the example in Caplan’s story. We could keep buying more TVs, but why? We have one. Just because we wanted to have three kids doesn’t mean we need to keep having more of them. We have the family we want.
What do you think? Are kids an “inferior good”, or should we all have as many as we can afford? Why do economists think they know so much about family size anyway? There’s a lot more that goes into the choice to have a kid than just the economics of it.
Photo: M Glasgow
How do you feel about the article referring that our children as goods?