Do People NEED To Have Children?

*looks around*

*fails to see serious undersupply of children*

*wonders WTF?*

Let’s see, people who were stupid enough to forget a condom, what do they deserve? A boot to the head, but the baby is probably punishment enough.

I’d love to see this serious undersupply of children. But I don’t. All around me, I see families clamoring for 2000 square foot houses and two ton SUVs, and suburban developments and freeways eat up the open space. Meanwhile, once those “rare” children are born, they’re ignored by their parents, wedged into underfunded classrooms and left to their own devices after school hours.

Things that are in short supply are generally valued. If there were an undersupply of children, they’d be given much more attention. As it is, our species is overwhelming the planet through sheer reproductive brute force. “Undersupply?” I wish.

I’d love to see this serious undersupply of children. But I don’t

A google search for “pensions demographic time bomb” ought to help you out.

I also disagree with Chris that “benefits parents provide for others are unasked for”. When you save money for retirement, surely you are implicitly willing that someone be around in future to produce the surplus that you intend to consume. So only people who planned to work for their entire lives (or who were stockpiling dried food for their retirement) could seriously claim that they hadn’t at least implicitly made plans on the basis that other people would have children.

I don’t want to have children, but I seem to be much more pro-immigration than the average Brit. Does this let me off the hook re the demographic time bomb issue? After all, it’s not your kids I plan to mooch off, it’s the kids of all the foreigners I want to let into the country.

Ophelia, I hope that wasn’t directed at me! Or the others here (I have a suspicion that Daniel is a non-parent, but until he discloses more about himself it’s just a guess). I guess you are putting things less diplomatically than I would, but I too was trying to indicate that parents do not have much of a claim on others (though their children might, which is what justifies the taxation). I agree btw w/ Daniel’s point about planning one’s life on the assumption that others will have children, though it hadn’t occurred to me.
But I have to disagree with you about schools: non-parents typically do use tax-funded schools, usually for at least 13 years of their own life; and those who succeed in those 13 years get another 4 or so at a massively subsidised rate (typically subsidized very heavily by the taxpayer and somewhat heavily by their parents). Parents (in rich countries) don’t normally get a financial return on their or society’s investment in their children; the financial return on schooling goes to the children schooled and, through them, into the general fund (for everyone); so when doing the accounting it is wrong to consider parents as the consumers of schooling.

And immigration is also an unreliable long-term solution because the source will dry up as developing countries get richer and therefore both less fertile and more attractive to live in. (I realise that won’t happen any time soon, but it seems obnoxious to rely on a strategy the success of which depends on other countries being poor). (Daniel, as usual, I’m asking you to correct me if I’m wrong about this).

dsquared: _I also disagree with Chris that “benefits parents provide for others are unasked for”. When you save money for retirement, surely you are implicitly willing that someone be around in future to produce the surplus that you intend to consume._

Many of my actions are predicated on assumptions about what other people will do, but it would be a more than a bit of a stretch to claim that I’m therefore and thereby _willing them to do those things_ and should give them my support in terms of time, effort or money.

Trivial example: if I choose to drive across London during the cup final on the assumption that lots of people will be glued to the tv and traffic will be lighter, I thereby knowingly benefit from their actions. But I’m neither asking them to benefit me in that way, nor am I willing them, and if things don’t turn out as I expected I have no cause for complaint.

Full disclosure: I want to be wrong about this one, but I just don’t see how the argument works.

Shouldn’t the bond market kind of notice when the birth rate drops through the floor, and you end up having to invest more money to get a given level of retirement income?

“Note also that non-parents benefit from the willingness of parents to pay for education, through the effect on property prices of proximity to good schools.”

Are you sure about that? I don’t know what nation you have in mind, but in the U.S., “proximity to good schools” usually means that you’re in a good public school district. That’s why the proximity is important; you need to live in the right area to send your kids to the schools in question. But public schools aren’t paid for by parents – they’re paid for by all the taxpayers in the relevant area, including non-parents.

It’s true that parents fund private schools, but it’s my impression (admittedly not based on first-hand experience) that private schools, especially the prestigious ones, draw students from a large area, and thus there is no particular advantage to living near one (aside, I suppose, from having a short drive to school, something non-parents don’t care about).

Chris: Or to put it in a legalistic framework, the implicit willing of the means falls under the good common law principle that if I contract with you that you will carry out some action, the contract implicitly obliges me not to act so as to frustrate your ability to fulfill your obligation.

If I hire you to prune my hedge, but then forbid you to use the pruning shears that were visible on my porch when we made the contract, a court would generally refuse to grant my action against you for breach of contract.

Harry, no, it wasn’t aimed at you, I was reacting to the tone of some other posts. A note of indignation at free riders.

And sure, you’re right about schools, but that’s sort of the point. One can find all sorts of benefits and harms from everything everyone does, and it’s pretty tricky figuring out the profit and loss for everybody of everything.

This business about parents doing everyone a favor by driving up property values for instance – that’s such a parochial, rich-person’s way of looking at it! A typical way of looking at it in the US, it seems to me, and less so in the UK and Europe where public housing and rental housing is not quite so marginalized as it is here. Hello? Driving up property values is not a benefit to people who can’t afford to (or don’t want to) buy real estate; on the contrary, it’s a harm.

So, people having children benefit and harm others, and people not having children do the same. I think it’s inane to claim that people without children exclusively harm parents, and parents exclusively benefit non-parents. And not only inane but – well, a number of unpleasant adjectives I’ll keep to myself.

“And the stuff about the public good is surely debatable.”

Agreed. It surely is debatable. And debating the issue was what I thought we were doing. Why take it so personally? I’m really at a loss to account for the snarkiness of your reply. I’m not “reproaching people who live their lives differently,” nor am I suggesting (god forbid) that women should be required to marry and have children. What I am suggesting is that there are potentially serious problems when fertility rates decline below replacement rates.

Another angle to look at this issue from is the quality versus quanity debate. Specifically, having a declining birth rate might not be such a bad thing if all the children born to bridge the gap turned out to be unproductive drains on society.

Encouraging social programs that increase a child’s health, safety, and education are policies that benefit the entire society. Focusing energy on quality and not quantity makes better sense for parents and for society as a whole.

Productivity gains could make up the shortfall declining populations impose AND could do so while improving children and parents quality of life (and even childless adults).

Betting on a practice is not willing the practice. Retirement funding involves bets, not willing that there be workers. Moreover, it really makes little difference when the surplus arises so long as it is there at the right time. As long as the subject of subsidy is involved, you need to factor in employment benefits, which are prety heavily slanted in favor of parents.

Cards on the table myself: I love kids and cannot tolerate the thought of burdening the world with more of them, nor of raising my own to face the likely hideously uncomfortable world they’ll inherit in the last half of this century.

I’m also in favor of far greater spending on K-12 and higher education and other public benefits than we now enjoy where I live, and if my taxes go up to pay for it, so be it.

Still. The looming Pension Time Bomb issue is not an indication that there’s an undersupply of children, and it’s not a reason to add yet another incentive to have children in a world that simply cannot afford to provide for the people that are already here.

Rather, the pension issue is a relatively minor symptom of an economy that is predicated on constant growth. That economy will end sometime in the next century. We can do it the really hard way and come up with a phaseable alternative in our lifetimes, or we can do it the impossible way and leave it for our grandchildren to solve.

Note: when I call the pension thing a “relatively minor” symptom of the greater economic problem, I don’t mean to belittle the suffering a pension collapse will cause. I’m seeing the results in my own family right now, and it’s hellish. It’s just that other effects of our positive feedback loop economic system will be much worse.

Okay, then can we have grandchildren and skip the children part? Let’s do that – so much simpler.

Of course it’s a choice. The difference between choosing to have a child and choosing to be blonde is that the one is irrevocable. The decision that the past me made binds me now. And it is reasonable for those who have not (yet?) made such a decision to respect the situation that those who have have put themselves into.

But Society doesn’t owe them anything. The “demographic time bomb” may or may not explode. If we sustain productivity growth rates in the future anywhere close to comparable to the latest US numbers, then more children would simply lead to higher unemployment. Prediction is a very difficult art, particularly when it concerns the future; one can’t base moral obligations on it.

“But in rich societies, where we risk a serious undersupply of children it might be very good family policy to give parents a lot, so as to a) encourage child-rearing and b) enable people to do it better (so that we get a superior product).”
Of course this is what the French are doing, by giving plentiful family leave to parents. It actually seems to work, as France has one of the highest reproduction rates in Europe (though still less than replacement?).

But I think you want to be careful here, because I can see this argument popping up down the road: we gave you family leave, so your kids “belong” to all of us (i.e. it’s ok, when they have grown up and are working, to tax them to poverty in order to support all us oldsters, because that was after all the idea).

One way to look at what’s owed to parents is to acknowledge we were all children once. So Tracy no doubt has a beef, because parents may get out of work that non-parents do. But the rage at parents in the spate of non-parents-are-the-new-trend articles over the last few years (I’ve been hearing a lot more of that than what Ophelia was talking about) never acknowledges that non-parents were children too, and have very likely already benefitted from any number of policies that favor children in society.

A couple of small thoughts (first, the standard disclaimer: I would like some children of my own someday, so these remarks should not be taken as anti-child or anti-parent):

1) Why can’t would-be parents in wealthy countries (the ones experiencing the reduction in replacement population) adopt from ones with an overabundance of children? Perhaps this would be considered immigration, but it seems qualitatively different from the migration of adults.

2) There is a crisis point heading our way in that a widespread culture of consumption and perpetual growth has led to a global economy built on a decreasing stock of resources. Having children to shore up pension plans in such an economy would be like putting on a bandage while poking holes in oneself: fixing a symptom but not the underlying problem.

3) What do we do with parents in wealthy countries who wish to have more than 2 biological children? I have no answers here, but the issues implied in (1) and (2) suggest that the question needs to be asked.

All this talk about how people in rich countries aren’t having enough children is crazy talk. There are too many people in the world. Somebody’s going to have to bear the burden of reversing the demographic trend. Why not us? Maybe we won’t have the same standard of living in retirement as the baby boomers, but it’s not like we’re going to be eating out of dumpsters.

“1) Why can’t would-be parents in wealthy countries (the ones experiencing the reduction in replacement population) adopt from ones with an overabundance of children?”

Because evolution frowns on things like that. Seriously. The desire to raise the children of somebody completely unrelated to you, instead of your own, is pretty strongly selected against. It’s functionally indistigushable from sterility.

“2) There is a crisis point heading our way in that a widespread culture of consumption and perpetual growth has led to a global economy built on a decreasing stock of resources.”

Read any Julian Simon lately? ;)

“3) What do we do with parents in wealthy countries who wish to have more than 2 biological children?”

Demand that they support them themselves? And otherwise mind your own business?

OK, replies to some comments:

1. When I say “externality”, I’m making a quite precise economic claim. I’m making the claim that the benefit from a society’s-eye view of there being children is greater than the sum of private benefits (net of private costs) to parents. And therefore, that without some subsidy to having children, parents would tend to underprovide children. I’m not sure that everyone on this thread who’s using the word “externality” is using it in the same sense.

2. It does “make a difference when the subsidy arrives”. If you plan to retire in 2033 on the basis of a portfolio of Treasury bonds, you need there to be a tax base sufficient to make the interest and principal payments for the years between 2033 and your death. Generalising, if you plan to consume without producing in some future year, other people will have to produce more than they consume in that year (unless you are actually storing consumption goods instead of financial claims; hence the crack about dried food).

3. On the housing issue; there is a genuine gain from trade here. If parents have a taste for school-preferred housing and non-parents don’t care, then exchange between the two will leave both parties better off. It’s certainly possible to get perverse distributional outcomes, but the gain has to be there.

4. The overlapping generations model doesn’t have externalities in it, not in any version I’m aware of. Old people exchange capital for labour in order to consume more than they produce; all of this takes place on the basis of exchange and all costs and benefits are internal in the intergenerational exchange. The externality is intragenerational; between old people who choose to forgo consumption/accumulation in the first period in order to produce children, and those who don’t and who have more capital in the second period as a result. I don’t understand or accept armature or cdm’s points, and I think that the charge of “partial equilibrium analysis” is bizarre.

5. I also don’t think you have to be Julian Simon to reject the neoMalthusian argument that we obviously already have too many people. It’s certainly and massively not the case from the point of view of food production.

“3. On the housing issue; there is a genuine gain from trade here. If parents have a taste for school-preferred housing and non-parents don’t care, then exchange between the two will leave both parties better off. It’s certainly possible to get perverse distributional outcomes, but the gain has to be there.”

No it won’t – not in the case of renters. Why are renters always invisible in discussions of property values? Another kind of confirmation bias?

I was conflating two criticisms, and that may have led to confusion. Let me address the partial equilibrium question first. Suppose we have two districts that are identical in terms of their quality of schools. Households with children and without children live in each (choosing where to live based on their preferences of other non-school aspects of the two districts).

Thought experiment 1. Suppose that there is an exogenous shift in the relative quality of schooling in the two regions. (For example, good teachers move from one school to the other for some exogenous reason.) Parents with children will want to move from the bad district to the good district. House prices will rise in the good district and fall in the bad district. Those in the good district (parents and childless alike) enjoy a capital gain; those in the bad district suffer a capital loss. To a first approximation, it seems to me that these cancel out. (It is true that there are gains from trade in the move to the new equilibrium, as parents move to the good district and the childless move to the bad district, but there is no externality.)

Thought experiment 2. Suppose instead that one district increases property taxes and uses the revenue to improve schools in the district. In this case all the residents of the district have paid for higher quality schools. This will again cause migration and changes in house prices in both districts. (The changes in prices will not be the same as in the previous case because the average quality of schooling has risen.) Parents and childless in the good district again enjoy a capital gain, but as previous posters have pointed out, they have in effect paid for it in this case.

Am I missing something?

My point about OG models I will leave for a later post, because it is more technical. I want to figure out how to try to say it more cleanly and clearly, and I don’t have time to do so at this moment.

ophelia:

You are absolutely right that, here on earth, people rent as well as own, and the precise implications are different. In the story I was telling, if we had renters and landlords, then renters in the good district would see their rent go up, landlords would see their income go up, renters in the bad district would see their rent fall, and so on. I was trying to find a simple setup in which to examine dsquared’s claim that (if I understand him correctly) parents’ demand for good schools generates an uncompensated benefit for non-parents. My story was already complicated enough, since it had four different sorts of people in it; I don’t think the basic point changes when there is rental housing.

The pyramid scheme argument for having children seems odd to me, but is a theme that is repeated in The Economist ad nauseam. The world is comprised of much more than people and it is complex enough that we probably should not drive every thing else to extinction, just so we can maintain an ample lifestyle in retirement. Are there any economists that can propose a system not based on the pyramid scheme? Could a quality-based system evolve, which includes a calculation for maintaining a diversity of life as well as life style choices? Does your legacy involve leaving a world of only people eating only corn and soybeans?

And why would you worry anyway? With the advent of the global economy and the might of the British and American Armies, your retirement is secure. We will have the children of other countries produce the goods we need and ship them to our countries for use, while increasing corporate profit and shareholder value. The poor and uneducated people that do not invest in the markets in your home countries will provide the service labor for the corporate shareholders in society.

With respect to the pension situation being “rescued” by immigrants: Given the societies that much of the immigration comes from, surely the question that the immigrants who are now expected to support the elderly of their new country will be asking of themselves is: Why on earth should I bother to support someone who wasn’t even willing to support themselves (by having children)?

Remember in the less developed world, children *are* your pension. Failure to have children is as stupid (or unfortunate) as failure to save for retirement. And it’s certainly not everybody else’s responsibility to make up for that carelessness. (Not to mention that failure to have children is often seen as a form of betraying your people/country/culture in general – Just look at the laws in many European countries 60 years ago.)

Of course, we can assume an effort to educate differently. But attitudes change slowly (especially since new immigrants are likely to be burdening themselves with children while being shocked at how hostile (relatively) the new home is to raising them). Not only that, but they also have their *real* responsibility (in their eyes), providing for the parents who raised them, either here or abroad.

Just how much burden (and for how long) can we expect the immigrant population to shoulder?

In answer, presumably lots if they are a small minority, and not much if they have enough votes to make a difference.

“Just how much burden (and for how long) can we expect the immigrant population to shoulder?”

If the population experts are to be believed, probably not much longer. The Population Surprise reports on the latest estimates. In brief, “44 percent of the world’s people live in countries where the fertility rate has already fallen below the replacement rate, and fertility is falling fast almost everywhere else” and “the evidence now indicates that within fifty years or so world population will peak at about eight billion before starting a fairly rapid decline.”

I’ve definitely seen some rancorous exchanges between the childed and the childless or childfree (though not in this thread). But it’s worth noting that from a demographic perspective, many of us are actually part of the same demographic trend. Demographers define “replacement rate” as 2.1 children per woman (which obviously does not make sense as applied to individuals, we’re talking populations here). If you have only one or two children, you’re part of the same demographic transition: modernization means declining fertility, and we now know that the rates won’t level off at about 2.5 children per woman (which is what the experts assumed in the 1970s), but will actually drop well below replacement.

“I just wish that child-raising, in the US at least, weren’t so hideously narcissistic.”

Agreed. But this is the flip side of the same coin: as Zizka has argued in other blog threads, childraising is a communitarian activity that has been thoroughly privatized — which is one reason why so many western women are simply refusing to do it: the burden and costs fall too heavily on the individual (most often the mother), and many women will no longer accept the terms of this bargain.

So what can happen over the next two centuries, as world population levels off and begins to decline? Am I correct in thinking this is unprecedented in human history?

David — the politics of social security are much mroe complicated than this. It’s not old versus young exactly. A lot of the political pressure for maintenance of social security/state pension payments comes from the adult children of aging parents who don’t want to bear the entire costs of their parents aging (as well as that of their children’s growing). The childless, having refrained from the enormous individual expenditure involved in raising children (and so having been able to save much more), benefit as well from the political pressure wielded by other people’s children to maintain the level of state pension payments. I’m sympathetic to Ophelia’s comment about free-riding being pervasive, but its worth having a look at it exactly where it occurs.

Chris Bertram asks me: (2) Even if you doubt there is an undersupply, you might want to ask whether subsidies to parents would be justified if that condition held – just to get clear on the principles you think we ought to espouse.

I’m sorry I missed this question sixty or so comments upstream, Chris.

Personally, I don’t have any problem at all with subsidies to children, especially of the public schools / school lunches / immunizations and other health care / library cards and recreation centers type. I advocate such subsidies even in the absence of an undersupply, if you’ll pardon the double negative.

But if there were to be an undersupply – ignoring for the moment just what, exactly, that would look like – there are a few places I’d turn before paying people to have kids. Transparent cost-cutting in old folks’ benefits, for one, such as putting price caps on Big Pharma’s products, or general efficiencies in government spending along the lines of the massive subsidies to the military and its contractors would – if those funds were reallocated – go a long way to ameliorate any pension undersupply without needing to encourage people to procreate a larger new generation of laborers. How’s that for a run-on sentence?

I forgot, I meant to answer Jeremy’s question –

“So what can happen over the next two centuries, as world population levels off and begins to decline? Am I correct in thinking this is unprecedented in human history?”

If you mean population decline, no. The Black Death chopped population in Asia and Europe and it took a looong time to recover – two centuries? I’m not sure, but a long time.

And then the population plunge in the Americas in the 15th century and after must have created a considerable hole too, no? Population was rising in other parts of the world at the time, but I don’t think it was rising fast enough to offset the plunge in the Western hemisphere.

Other people’s children may well finance my social security payments, because I live in a country that has chosen a Pay-As-You-Go (PAYG) scheme for its pension plans.

However, it’s more and more apparent that the PAYG scheme is not going to sustain itself unless we have more children and/or die younger. That is, we’re going to have go to a fully-funded scheme, and possibly a means-tested scheme, if we’re going to have anything at all.

Now, maybe I should have a lot more kids to support the Social Security Administration when I’m older. But it’s not my fault that leaders of my parents’ and grandparents’ generation failed to anticipate demographic changes and choose a funded retirement scheme.

Now, I am willing to pay school taxes, and so forth, because I want to live in a society which raises healthy, intelligent individuals. That is, I support schools, and benefits for people with children, for the same reasons I support welfare, and homeless outreach, and public-health initiatives.

But my support for those things is not based on some sort of cross-generational obligation, nor on a financial plan: it’s much cheaper to save money and use it for retirement than to have children and hope they pay enough in payroll taxes that your government will be able to give you a secure retirement.

Many childless people feel society’s not playing fair by them. “Sure, I’ll help raise your kids if you’ll commit them to keeping me off the streets when I’m old.” Problem is, there’s no such animal. The law says I have to work more hours, pay higher rates of federal and state tax, school property tax, higher health insurance rates, etc., all for the well-being of children I don’t have.

Children are taken as a good in themselves that society must nurture. The principle dovetails nicely with our instinctual leanings. Childless people are, increasingly, to fend for themselves. Only in very extreme circumstances–at the emergency room and in the case of utter destitution–is the government active on their personal behalf (behalves?). On the job, preferential treatment of parents is commonplace.

I happen to think we’re better off helping ensure that kids are properly nourished and educated, and that money extended to such uses is well-spent. But I’d be a lot happier about helping foot the bill if I had the kind of social support I’d get in, say, Sweden. At a time when the future prospects for most people aren’t great, the perceived fairness of the system is going to be a bigger and bigger issue.

As long as we’re at it, we might ponder the potential benefits to society of expenditures directed at developing its aduts, without regard to their status as parents. I’m sure throwing everyone a free college course every semester would yield a net benefit…

many of the posts above are valid, except when they make bone-dumb errors such as taking SUV’s as evidence for their prejudices about population.

Well, seeing as I’m the only person in the thread who mentioned SUVs, let me suggest that any bone-dumbness lies solely in the above interpretation of what I actually wrote.

Where I live, SUV ownership is very often explained away as necessary for “hauling the kids and all their stuff,” and – though less so in the wake of Keith Bradsher’s work – due to the vehicles’ tanklike structure and the safety drivers assume this conveys to the occupants of the childseat.

And non-parents buy a hell of a lot of SUVs too, and most of them never go offroad, and some SUV-driving parents actually need four wheel drive a fair amount of time, and many parents drive their kids around in relatively efficient minivans or hybrid Honda Insights. But trends are trends: the family market accounts for much of the popularity of SUVs. If saying so is bone-dumb, then Ford and Chevrolet and Toyota are spending a lot of bone-dumb money retrofitting their sedan factories to build Excursions and 4Runners.

“Perhaps, but at the long end, nonergodicity comes into play; who the hell really knows what will happen in 30 years? The bond market tends to sensibly assume that things will get sorted out eventually, both for Humean (things always have in the past) and Kantian (it is impossible to go about your daily business on any other assumption) reasons.”

True, but the birth rate shows up pretty clearly in GDP growth estimates. It’s apparently good at calculating much more subtle things, so why not this? Now that I think about it, is there some stat evidence out there on the birth rate and investment returns? Google isn’t producing much.

“However, it’s more and more apparent that the PAYG scheme is not going to sustain itself unless we have more children and/or die younger.”

…..or we contribute more to the system, which is always off the table for reasons I don’t understand.

Oh, and a few minutes of algebra points out that the percentage of lifetime earnings necessary to ensure retirement in exactly the same in a private or public system. The ridiculous “privitization” schemes suggested in the 1990s – and apparently Bush is going to start pushing another as his major policy initiative – all either rely on double-counting or making one generation pay a double retirement rate.

Armature, your argument here:

The childbearing segment of a generation has children based on the assumption that someone will be around to provide a market for the children’s labor.

is daft; there is clearly a form of Say’s law working here. If one has children, then one knows that there will be a population, and therefore a labour market, in future. It is not remotely symmetrical and I respectfully suggest you give up trying to make economic arguments on this point.

Jason: yeh, but come on. Show me a 30 year GDP forecast and I’ll show you a man who wasted an afternoon.

“Second, childraising is a communitarian rather than a rational-self-interest activity. Parents are either wasteful idiots or else they’re contributing something to society.”

And those are the only two possibilities?

I’m getting really really curious (and baffled) about this stuff. Are people seriously saying that people have children primarily altruistically? As a duty? So that everyone’s pensions will be paid in the future? Really?