Finally and long overdue, here is my book review of Valuing Children, Nancy Folbre’s latest book. The overall goal of this book is to show how and why children matter for economic life, to provide estimates of the economic value of family (nonmarket) childcare and parental expenditures in the USA, and to raise critical questions about the size and kinds of public spending on children in the USA.
Folbre formulates four questions which she sets out to answer: (1) Why should we care about spending on the children? (2) How much money and time do parents devote to children? (3) How much money do taxpayers spend on children? And (4) who should pay for the kids (in other words, which share of the costs of children should be borne by parents and by the government)?
In answering the first question, Folbre rightly points out that children do not fit well as a category in economic thinking. Economists have often described child rearing as an investment (expecting to generate a flow of future happiness) or similar to a pet or a durable consumer good. Yet unlike these other categories, children cannot be bought or sold. And, Folbre argues, children provide important benefits to future fellow workers and taxpayers. Parents thus provide not only services of great value to the children, but also indirectly to those who will benefit from these children’s future societal contributions. Acknowledging this crucial (re-)productive role of parents prompts us to reconceptualise households as units of primarily producers of human capabilities, rather than as consumers. This creation and maintenance of human capabilities is argued to benefit the economy as a whole. Reconceptualising the economy to take this into account thus raises questions of both efficiency and fairness – and this is why we should care about spending on the children.
Folbre knows that in this world one has to measure things to make them count – and hence in the middle part of the book she provides estimates of the costs of children. I found this the most exciting part of the book – and a very valuable contribution to knowledge on parenthood, the economics of families, and public policies affecting families and children.
Children remain to a significant extent invisible in economic studies. Of course, for many decades mainstream economics has provided estimates of the private costs of children. The problems with these estimates can perhaps best be illustrated by looking at the standard construction of household equivalence scales. These are the factors economists use if they want to compare the welfare of households with different composition. For example, a common equivalence scale to compare households with different sizes divides household income by the square root of the number of household members. So a household of two members is considered to have exactly the same material welfare if it has 1.4 times the income of a person living alone. At first sight, this seems to make sense, since there are large economies of scale from joint household consumption (e.g. a couple needs the same number of durable consumption goods like a TV or a refrigerator as a single adult). Yet equivalence scales typically give children the same weight as adults (as in the just mentioned scales) or give them smaller weights as adults – following the assumption that children need less food and other such items. The scales treat children as if their needs are far lower, or at best the same, than adults. But this assumption ignores the large costs for childcare and education that children need. Either childcare has to be bought in the market, or else its costs are the forgone lifetime earnings of the person caring for the child – in either case significant sums of money. The underestimation (in equivalence scales) or the entire neglect (in GDP) of the cost of family childcare is important for several reasons, including the fact that these equivalence scales are used to calculate poverty statistics. All other things equal, the number of children in poverty will be underestimated. Moreover, ignoring nonmarket work in GDP calculations leads to the conclusion that countries which have commodified childcare are, all other things equal, better off than those where parents and relatives are caring for children. There are many reasons to doubt that this is the case – for example, according to UNICEF Dutch children are the happiest in the world, yet the Netherlands has by North-american standards very high levels of nonmarket family childcare.
Folbre then moves on to provide estimates of the cost of children, which fall into two main categories: expenditures and family work. Data needed to calculate the per-child expenditures in the USA in 2000 are provided by the US consumer spending surveys, and range on an annual basis from $ 6,700 per infant in families with three or more children, to just over 12,000 for teenagers in one-child families. In a one-child family, the total cost of expenditures for a child during their entire childhood will amount to $205,383. For a child in a family with three or more children, this lowers to just under $128,000. High-income parents spend more than low-income parents, but whatever the family size and household income, parents spend large sums on raising their children.
Using time diaries administered by the Child Development Supplement of the US Panel Survey of Income Dynamics, and the American Time Use Survey, Folbre estimate the time parents devote to family work (child care and domestic work), and what this work would be worth in financial terms. The first hurdle to take is to sort out the conceptual questions – what counts as work, and what counts as leisure, and what is a useful typology of family work? Folbre proposes to distinguish between a number of different conceptual categories for parental care: “participation with a child in a primary activity, participation in a secondary activity, supervisory responsibilities, being on call, and engaging in tasks that indirectly benefit the child (such as cooking, cleaning, washing clothes, or making appointments and arrangements for special activities)” (p. 106). Folbre produces a very interesting overview of the time spent on the different components of family care by parents, and how it differs according to the age of the children (aged between 0 and 11), and on the number of parents in the household. These detailed statistics allow us to compare children and parents in different situations. For example, the younger the child, the more she is engaged in activities with her parents. A child with two parents present enjoys on average 32 hours a week of active parental care (with either or both of the parents present) whereas for children of single parents this number is 23 hours. Children spend much less time alone with their fathers than with their mother: in two-parent households children aged 0 to 2 spend 19.5 hours with their mother alone, and 7.9 hours with their father alone – and this parental gap remains significant when they get older (e.g. 11.4 versus 4.3 hours when they are aged 9-11). I would have been very interested in finding out if this parental inequality in family child care is also present in gay couples: but the data did not allow for such analysis, nor for an analysis for different racial/ethnic groups, where fatherhood may be experienced differently.
How could these time allocations be translated into a monetary value? Folbre argues that the replacement cost approach is the most appropriate way of valuing labour inputs: use the wage rate required to hire a replacement for the work done, rather than the actual or potential wage rate of the person doing the work. Folbre opts for a lower bound estimate. In her estimates she values the hours of active care by the wages of an average child care worker ($7.43 in 2000, which is low compared to the median for all workers at $13.74). For the passive care hours she uses the federal minimum wage. In both cases she assumes the presence of two children. Sleeping time and overlapping parental time are not included in these estimates. Under these, in my opinion very modest assumptions, the annual cost of parental family care in a two-parent two-child household would annually amount to $13,352; in a one-parent family $11,024. (p. 129). If we add to these the direct monetary expenditures, then the total parental expenditures annually average $23,243 in two parent households, and $17,125 in one-parent households. The time cost of parenting takes about 60 to 65% of this total cost.
Having analysed what parents spend on their children, Folbre moves on to investigate what the government spends on children. She shows that in the US federal policy provides better protection for the old than for the young and that there are great inequalities in access to health care and education. Folbre also lays out the different US public policies that affect parenting and children; for a non-American audience this is a very useful overview for those wanting to start getting a grip on the different types of American family-related policies.
If I have one criticism on this book, then it is the way Folbre has answered the fourth and final question: Who should pay for the kids? Which share of the large cost of raising children should be borne by parents and society? Folbre outlines that there are three related but distinct reasons for public spending on children: social investment, intergenerational reciprocity, and moral obligation. The social investments argument highlights that investments in children’s health and early childhood development programs provide benefits that far exceed their costs. Concerning intergenerational reciprocity, Folbre argues that most of us are repaying the older generations for what they spent on us, or making equivalent gifts to the next generation – but that “we do so unevenly, in an institutional structure that reproduces existing inequalities and rewards reproductive free riding.” (p. 183). As for the moral obligations, “parental efforts should be rewarded in ways that both honor and reinforce the profound moral commitments they represent” (p. 183). My concern with this concluding chapter of Valuing Children is that these are huge questions in moral philosophy – and I know of several people who have been breaking their heads over these issues for years, and are still struggling with finding the answers. Although as a parent I hope Folbre’s answers are the right ones, as a political philosopher I am not so sure. For one thing, stressing the argument that children will provide future societal contributions may lead to the morally perverse effect that we will steer public resources to the most potentially-productive children, and that we value children for what they will be, rather than worrying about their well-being right now independent on how that affects them as future-adults. And what do we do if there are trade-offs to be made in policies aiming at children-as-children versus children-as-future-adults? Moreover, philosophically speaking, even the most radical views such as those of David Benatar who argues that we are harmed by coming into existence require serious consideration: if Benatar were right, what would be the implications for Folbre’s analysis? Also if one wishes to develop a more pro-family argument relative to the current political arrangements, it needs to be developed carefully and confronted with all possible objections if it wants to stand the test of critical scrutiny.
Folbre has provided a very valuable contribution to knowledge in revealing the size of parental expenditures and family work and in arguing for their relevance in economics and public policies; yet as far as the normative justifications of public spending on families are concerned, more work is needed. It is time that those philosophers who have been procrastinating with their unpublished thoughts, books and papers, contribute their share of the work needed to be done in thinking about the value of children and parenthood (… alas, this procrastinating crowd includes me too).