Monday, September 10, 2018

The other counterfactual to wasteful childhood spending

In the modern world, much parental investment in their children is wasted. Parents would almost certainly be better off investing less per child.

They overinvest relative to what the twin studies reliably tell us we should do. Genetic influence is large for most things we care about (e.g. 62% for core educational achievement in the UK. Or if you want a wider sample of traits, look at Table 1 here and see how many are in the category of "high heritability"). Not only that, but most parenting is in the category of common environment, in the language of twin studies - non-genetic factors that are common to both twins in a family. And shared environment generally doesn't do very much, particularly for outcomes measured in adulthood. Which means that all the things you do in common for your children, whether it's the choice of school district, or commonly instilled values, or not having a TV in the house, or whatever... none of them do that much. The components of that which cost you money are probably money spent in vain. The environment terms that do seem to matter are mostly idiosyncratic environment: the non-genetic factors that differ between two twins in a family. Unfortunately, we don't really know what these are. People like to talk about peers at school, but it's also parasites, and head trauma, and infectious diseases, and measurement error, and lots of other weird things.

To sum all this up - parenting doesn't matter very much. It certainly doesn't matter nearly as much as people these days think it does. The main reason nobody notices this is that parenting is nearly always correlated with genetic variation. What matters is if you have the kind of genes that would make you want to read a book to your children each night. Whether you actually read the book or not is far less important. Outside of twin studies, adoption studies, and a few other places, these things are very difficult to tease apart.

But I suspect a lot of people will instinctively resist this conclusion. Am I really saying parents should spend less on their children? People being what they are, they will resist the scientific validity of the above claims because they sound like they're implying parents should be more stingy towards their children. How could I be so heartless and selfish!

First off, if you're ever tempted to deny basic facts just because you don't like the conclusions that flow from them, you're so many levels deep in shonky motivated reasoning that I don't know how to help you.

But more importantly, you're assuming a particular counterfactual, one which I never stated.

I said that parents should spend less per child. And that's true.

When I say that, you're assuming that the relevant tradeoff is "take the money you were going to spend on maths tutoring, and spend it on a fancy new car for yourself". In other words, you make the choice between altruism and selfishness, and then declare yourself righteous by advocating on the side of altruism.

But spending-per-child has both a numerator and a denominator.

People only seem to think of the numerator, to spend less in total. Of course, there's another way to reduce spending per child. Namely, hold total spending constant, and have more children.

And it's bizarre that this is almost never the tradeoff that people think of, even though they should. The real tradeoff should be "skip the maths tutoring and have one more child".

When phrased this way, the choice is much harder to feel righteous about, because now altruism is stacked on both sides of the ledger. And the altruism is actually quite jarring when considered explicitly.

"I'm saving for my child to have a debt-free college experience at the best university possible! What could be more noble than that?", asks John Q. GenXer. Well, let's phrase it differently. Suppose that you have two children, and you want to pay for both of their college. You're setting aside, what, $400K or so? In practical terms, that would go an awfully long way towards funding the entire existence of child #3. Suppose you had to confront the actual child #3, in some hypothetical universe. You have to tell him, "Sorry, son, I chose for you not to exist so that your older brother wouldn't have to have college debt."

Put that way, it doesn't sound nearly so noble, does it? In fact, it sounds downright disturbing and shallow.

And yet that's the actual alternative being faced. It doesn't feel that way, because the children you don't have aren't salient, or even fully real. But if they were, they'd be much harder to treat so callously.

The "aborted daughter" meme made this point very powerfully:

The late, great Gary Becker made a similar point, in the language of economics. People don't love their children, as much as they learn to love them. Because exactly as above, at some point people typically make a choice to stop having more. And yet if the children came along by accident, they'd love them anyway, very intensely, and would risk their lives to save them. But ex ante, they go to considerable lengths to make sure the children don't exist in the first place.

People aren't perfectly altruistic, of course. Surviving on zero sleep for 10 years, instead of 4 years, is a non-trivial difference to one's quality of life over the period. If a couple decides they simply can't do any more, so be it. Let he who has donated all his wealth to charity cast the first stone.

But there is a group of people for whom the alternative counterfactual is crucially important. These are the couples who feel that they might like to have one more kid, but they just can't afford it. Those are the people who are making the wrong choice. The piano lessons and the maths tutoring don't matter. If endless driving the kids to weekend soccer is too hard, just don't put them on the soccer team. They'll survive. If you don't have a huge house, then maybe they'll have to share a bedroom. People have turned out just fine, starting with much worse.

Have one more child, and spend less on each one.

The spending doesn't matter. The child does.

For the world, firstly. And for the child themselves.