The Agenda

Parental Investment

In this morning’s edition of The Transom, Ben Domenech juxtaposes two articles on child-rearing: the first is Scott Tong’s Marketplace profile of the Jackson family of Charles County, Maryland, a diverse middle-income suburb of Washington, D.C., and Adam Davidson’s new column on the market for baby products. Davidson draws on the work of the Princeton economic sociologist Viviana Zelizer:

In previous generations — and for most people currently living in poorer countries — having children was an economic investment. Viviana Zelizer, a Princeton sociologist, in her 1985 classic, “Pricing the Priceless Child,” tracked how childhood in America was transformed between the 1880s and the 1930s. During this period, Zelizer says, parents stopped seeing their children as economic actors who were expected to contribute to household finances. Families used to routinely take out life insurance plans on their children to make up for lost wages in the not unlikely event of a child’s death.

But eventually, increased societal wealth, child-labor laws and the significant drop in child mortality led parents to reclassify their children, Zelizer explained, as “a separate sphere, untainted by economic concerns.” This came along with “an increasingly sentimentalized view of children,” in which their comfort and protection can be given no price. Now, for the first time in human history, having a child in the United States is a net financial cost for a parent.

Meanwhile, Tong describes the extraordinary lengths Louis and Nikki Jackson go to provide their children with enriching extracurricular experiences – traveling constantly, sacrificing sleep and sanity, spending prodigious amounts on equipment and lessons, etc. – which they see as the surest route to eventual academic and economic success: 

The point of all this, Nikki and Louis explain, is to build their junior resumes with academics and activities, the currency of future school and job applications. Once, only the wealthy ran this kind of race. Now, kids from middle-class communities like Charles County (income per capita: $36,000) have entered, too.

This suggests that while Louis and Nikki Jackson recognize that their brand of energetic child-rearing is a net financial cost in the near-term, it will yield significant benefits for the Jackson family over time. That is, their implicit time horizon takes into account future income gains that will accrue to their children.

I mention this because our sense of the public policy implications of this rise in household expenditures associated with extracurricular enrichment, etc., depends to a large degree on our mental model of child-rearing. Some believe that child-rearing is best understood as a form of consumption or even self-indulgence, a view that was humorously distilled in the new Noah Baumbach film Frances Ha. Another view is that child-rearing represents an investment in the future — in the future of a particular family, like the Jacksons, and more broadly in the future of the wider society. Having socialized various forms of old-age provision, virtually all of the affluent market democracies, including the United States, depend on a productive workforce to sustain commitments to retirees. So the investments the Jacksons are making in the earning potential of their children benefit their children and (presumably) future grandchildren, but also everyone who at some point intends to take advantage of various old-age social insurance programs. This view is discomfiting for those who resent the idea that the modern mixed economy binds the economic fate of citizens together in this way. But it strikes me as a pretty good description of reality. 

And so this leads us to a few other questions. If child-rearing represents a form of investment in our collective well-being, is it appropriate to subsidize it more generously — or rather to equalize the treatment of parental investment in the human capital of children with investment in financial assets? Like Robert Stein and Ramesh Ponnuru, among others, I favor a substantial increase in the child credit as a strategy to ease the burden on middle-income households with children. Yet if we start thinking about child-rearing in this way, it might also raise questions about how families choose to deploy their resources. For example, one might believe that the Jacksons ought to spend less on sports and more on Kumon-style tutoring sessions. When we start from the premise that the Jacksons can do as they see fit with their disposable income, such questions don’t arise. When we see the choices the Jacksons make as relevant to our collective well-being, the issue potentially becomes more fraught. Because I believe that families should be given very wide latitude when it comes to child-rearing decisions, I can see why some conservatives and libertarians find the discourse of parental investment and collective well-being very problematic. But I think it’s pretty easy to both say that middle-income parents deserve a break on payroll taxes that reflects the fact that child-rearing isn’t quite the same as, say, buying a sports car and that this should not justify new levels of intrusiveness.

Reihan Salam — Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

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