The Empty Playground and the Welfare State
From the May 28, 2012, issue of NR

(Darren Gygi)


Ramesh Ponnuru

A debate broke out recently in the blogs about the ethics of having children. The occasion was the publication of a remarkably silly book arguing that reproduction is immoral. One blogger argued in response that people have an obligation to create new life as an expression of gratitude for the life they have been given. Another denied the existence of any such obligation but argued that having children is an important source of happiness for most people. In this fact he finds sufficient justification for having children, and for governments to help people afford to have them.

The discussion, while interesting, would have been unintelligible throughout most of human history. The absence of reliable means of contraception meant that having children was a less discrete decision than it is today. And while many people felt an obligation to bear children or wanted the emotional satisfactions they can bring, they also had an overwhelming practical reason for wanting them: They needed the help. They needed their offspring’s labor. They needed children, especially, to avoid hunger and privation in old age. The bargain was simple: Parents take care of their children until they are able-bodied, and in return get taken care of by their children when they no longer are.

We still need to have children so that we can enjoy a secure old age. Modern societies have disguised the old bargain by socializing it. They maintain expensive government programs to assist the elderly, financed by successive generations. The children still take care of the elderly when they grow up, but now it’s all the children providing for all the elderly, collectively.

In some ways this arrangement may represent an advance for civilization. Most people seem to think so. But it has a little-appreciated drawback: It imposes a heavy, if hidden, burden on parents, especially those with several children, and societies that adopt it therefore tend to have fewer children. For both moral and practical reasons, it is time to revise the generational bargain again.

Incentives tend to change when activities are socialized, and provision for old age is no exception. Now it is possible to enjoy a free ride, as the economists say: Don’t raise children yourself, but benefit in old age from the fact that others have done so. Looking at it from the other direction: Parents contribute more to the programs than non-parents who pay the same amount of tax, but they get the same benefits. One ancient motivation for having children dramatically shrinks (although it does not vanish; many elderly people still get a lot of help from their kids). One might therefore expect that the introduction and expansion of old-age programs would lead people to have fewer children. One might further expect people to marry later in life, and fewer people to marry at all, as they envision lives with fewer, or no, children.

The fact that children are not only future contributors to old-age programs but beneficiaries of them does not force any modification to this analysis. The childless still free-ride. Or think about it this way: Imagine a society where from time immemorial each woman has had two children. For one unusual generation, each woman has three children, and then the society reverts to the historical norm of two. The temporary increase in fertility would improve the finances of that society’s old-age programs, and this effect would never be undone. The ratio of contributors to beneficiaries, that is, would temporarily rise above what it had originally been and then fall back to its original level but not below it.

Nor does the fact that governments finance the education of children by taxing everyone, including the childless, affect the analysis. Educational expenses are only part of the economic cost of raising children, including the cost of forgone income. And everyone got an education paid for by someone else, whether his parents or taxpayers generally. Parents are not free-riding on the childless.