No mom, I don’t think raising kids is a fool’s game. This is the title of a recent article from BusinessWeek Online (http://news.yahoo.com/s/bw/20071112/bs_bw/nov2007pi2007119694057) which asks an interesting question. While the costs involved in raising children in the US seems to be escalating out of control, and these little ones are contributing to a lesser degree to the family’s economic well-being (they are no longer needed to help in the fields the way they once were), is it worth it to have children any more?
Considering the opportunity costs that spending money on children requires - the missed vacations around the world, the generous gifts to alma maters and worthwhile charities, or real estate investment - does it really ever pay off? I don’t know about you, but I have seen my share of smart-mouthed, impolite, disrespectful teenagers that make me cringe to imagine having to love despite their attitudes. Is this what you get for rearing and sacrificing for your progeny? How does it make any economic or emotional sense to have kids these days?
Here’s your answer: the aging and slow-growing population, along with the lengthening life expectancy, are going to insure that when my friends and I reach “retirement age,” whatever that might be, there is going to be no governmental safety net, no Social Security benefits and Medicare. The unending nursing shortage will only grow worse, meaning that as supply grows more slowly than demand services are going to increase in cost. In the end, it will pay to have children to provide convalescent care for us as we get too old to care for ourselves. And since the odds seem to be increasing that your kid will turn out to be completely unreliable it makes sense to have more than one - just in case.
So the question of whether raising kids is increasingly a fool’s game seems a little short-sighted. Have kids (or adopt them) so you can be sure someone will be around to provide service for you when you can no longer take care of yourself, and hope that the present value of your investment will rival the potential cost of that service in the future. Welcome to graduate school economics!
2 Comments
that’s pretty funny eric.
from a strictly economic standpoint, i think that your cost benefit analysis explores some good points.
however, i think that most people would argue that the main benefit from having children is not derived from the financial investment, but from the emotional investment, which most people don’t like to try to place a dollar value on. I do think it is possible to do that; although complex and tacky.
another thing to consider, though, is whether or not simply raising a child will gurantee that they will take care of you when you are old. maybe you’re saying that you expect the system, which must be supported by the next generation, will support you/us. it’s kind of a scary thought. but it seemed to have worked for the parents of the baby boomers, right?
now, we’re stuck in the “sandwich generation” double duty…. or burning the candle at both ends.
it’s a tough place to be.
as for stright up saving for retirement… jeez, i don’t know how we’re supposed to do it.
if you take a snapshot of what’s been going on for the past year or so, i don’t know how we’ll ever control inflation. and i also don’t know how we’ll ever make enough money to save ourselves.
things like going to graduate school to get a degree that will hopefully allow you to earn a geometrically larger sum of money and have growth potentials that are parabolic seems about the best way to approach the task of becoming financially secure. but i don’t know how many people can qualify to get those kinds of degrees.
sure there are always outliers, who don’t need the advanced degrees, but those are statisical abberations.
i don’t know what the right answer is, but i can only imagine that having children as a retirement investement is probably not the easiest approach.
hope you’re doing well, nice to see that you’ve got a blog going now. i’ll stop by from time to time and see what’s on your mind.
While society as a whole may suffer with decling birthrates, individuals (particularly men) are often much better off without the financial burdens of having to support a family. More importantly, it takes 2 incomes (unless one party is a multimillionaire) to raise a family and still have decent standard of living and save for your retirment. Trying to support a family on one income for more than few years is road to financial disasters (in the absence of the breadwinner being a mulitmillionaire).
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