The Sort of Thing That Drives Economists Up a Wall:

A comment related to my technology and birth rates post below says:

I cannot help but think that you are treating people like a commodity (reduce costs and increase demand).

I think a big barrier to childbirth is actually our culture, which cannot see why investing into another is more important than investing in one's self.

Child creation is like a commodity in that if you reduce the price, you'll increase demand. Cost matters. Culture matters, too, of course. But even if you hold constant — as a supposedly culturally dictated factor — the amount that a person is willing to invest in a child, as the per-child decreases, the number of children in which the person is willing to invest increases.

If a family feels that they can't spend more than $50,000/year on children without doing things that are too painful to them (e.g., getting a high-paying but misery-inducing job), and the cost of having a child rises from $15,000 to $25,000, they'll be likelier to have 2 children rather than 3. If the costs decline from $25,000 to $15,000, they'll be likelier to have 3 rather than 2. Likewise, if each extra child produces nine months worth of pretty serious discomfort and some amount of health problems stemming from the pregnancy, then on the margins some women will choose to have fewer children, even if you hold culture and willingness to invest in others constant.

Moreover, people's willingness to invest in others may change over time. Twentysomethings may want to play around and have fun; fortysomethings may be more willing to invest in having children; but by then, having children may be medically impossible or too difficult. If technology changes to allow people in their 40s to have all the kids they then want, then — again, keeping culture constant — they may end up having more kids.

Perhaps I'm mistaken, but my sense is that many people resist economic analysis because they find it distasteful: People shouldn't be treated like commodities (as if I'm suggesting that I be able to sell my wife on the open market). We should be paying attention to the grand plan of making people more unselfish rather than to technocratic matters such as cost and incentive (as if campaigns to make people unselfish have enjoyed notable success).

Yet these sorts of gut reactions, and the slogans attached to them, aren't going to change human nature. With very few exceptions, as tasks get less costly — or, if you prefer, get less painful and uncomfortable — people will undertake those tasks more. One can debate how important the cost savings that I describe are compared to all the other costs of having children. But it's a major mistake to just close one's eyes to costs and how people react to them.

Related Posts (on one page):

  1. The Sort of Thing That Drives Economists Up a Wall:
  2. Technology and Birth Rates: