"Forthwith Ajax, son of Telamon, slew the fair youth Simoeisios, son of Anthemion, whom his mother bore by the banks of the Simoeis, as she was coming down from Mount Ida, where she had been with her parents to see their flocks. Therefore he was named Simoeisios, **but he did not live to pay his parents for his rearing**, for he was cut off untimely by the spear of mighty Ajax, who struck him in the breast by the right nipple as he was coming on among the foremost fighters;"
Your post at the link is great. I don’t disagree with the more general proposition that money can influence culture. For me it is clear that money and influence in strategic places has moved our culture deliberately in this maladaptive direction you are fighting now. So yes.
I think this ignores the bottom-up problem of cultures that lack culture, while shopping for culture. They don't know what's good for them, by definition. It's the same issue of democracy: It's a great idea, if the electorate has a clue. The electorate has no clue, and so democracy turns into a farce.
To my eyes the real problem with the human species are psychopathic and psychotic traits. Solve those, and many problems fall like dominoes. This won't get solved though, much less because it's difficult, but because these two traits are actually adaptations the species has used, and will continue to use. Being deeply and genuinely good, and being deeply in touch with reality, are both maladaptive to some real degree when contrasted with alternatives(being a highly skilled cheater/having some self-serving but delusional personal narrative that allows you to crush your enemies).
I do say of myself that I would rather not have existed, and in my view it is not the same as being suicidal. If you gave me a button to erase my existence entirely, I would press it, as there would be no further consequences; suicide has a lot of messy consequences for a lot of people beside me.
Beyond that, I feel that the abstract version via taxes is probably to be preferred to a direct debt/claim towards my parents. I can navigate the tax code to my advantage without slighting anyone in particular, while it might be a strain on my relationship with my parents to not be more productive in the personal claim scenario.
I would mind that, and in my perfect world lenders would always get repaid. I pay my taxes without tricks, I support my parents and grandparents when needed, insofar as I can, and so far I have donated 20% of my pre-tax income, so I would claim I am not coming from an ascoial place.
But, as you pointed out initially, the deal is in practice not a guaranteed mutually beneficial one and I, as someone claiming to prefer nonexistence, find that I would be the one being cheated here. And I'm not sure the proposed betting market would get around this.
Say there was a perfect 10% prediction for my contract, and I am the unlucky 1 out of 10. I don't quite see why it should be binding to me, if all of the upside is externalised.
At the very least, in line with your proposal (?), you would have to grant children the possibility of rescinding the deal, maybe by choosing some humane euthanasia option.
Parents could get insurance. Maybe some might renegotiate. And then we would probably arrive at an equal situation to what is the case now, where people do what seems about right to them, all things considered. And if the two cases are similar, I would prefer the abstracted version, so my legal bindigs don't sour the emotional relationship with my parents.
Yeah, but maybe the interesting part is that your unborn children would also have to be taken into account. They would be able use their future income to improve your lot in life until it gets you to the point that you decide that life is worth living, thereby having them. To Be Or Not to Be becomes a communal question contemplated in communion with all your potential decedents. Nay, a communal enterprise, a joint venture! - It becomes a cosmic Hamlet organism stretched across space and time, stretched so thin and so far that it resembles a personal god, born just for you, to contemplate your being.
That is an interesting perspective and a nice suggestion to think about things, but it isn't changing my n=1 stance. I am rather comfortable in a materialistic sense, and improving that over time has made no difference in my fundamental philosophical position on my preference for existence.
In fact, it is one major factor in not having children for me. From a personality psych pov, it makes sense that some people are just born with rather weak reward systems, and I think I have drawn one of those straws, and wouldn't want to potentially grant my children the same unfortunate circumstance. Not that it necessarily has to be so, regressionto the mean is a thing. But the chance is greatly increased.
In that way, even when I contemplate in communion, as you suggest, my conclusion remains unchanged.
Perhaps what you require is for future generations to trade in meaning, passing to you a claim on what will make their lives feel meaningful, share in their future wealth of life-satisfaction brain states.
Perhaps, though I find myself more aligned with negative utilitarianism, making sacrifices to make things less disagreeable to me and others here and now, whereas I am fundamentally selfish enough to not hold myself hostage over the maximizing of future experienced meaning.
It is the hallmark of the market’s invisible hand that it brings the selfish to contemplate how to best serve their fellows. The alchemy of markets, if you will.
It's a good idea to give parents the right to a share of their children's future taxes. I think this could do something interesting to educational institutions. Instead of paying a school to teach your child, the school could buy a portion of the future taxes and educate the child in order to increase the school's expected return. This would incentivize educators to teach students useful things.
Hey, I thought of it first! (but didn’t tell anyone). Great point, if I may still say so. To me this is actually the main reason tradable child tax equity is a sensible policy. It gives educators skin in the game.
As birth rates plunge, many politicians want to pour money into policies that might lead women to have more babies. Donald Trump has vowed to dish out bonuses if he returns to the White House. In France, where the state already spends 3.5-4% of gdp on family policies each year, Emmanuel Macron wants to “demographically rearm” his country. South Korea is contemplating handouts worth a staggering $70,000 for each baby. Yet all these attempts are likely to fail, because they are built on a misapprehension.
Governments’ concern is understandable. Fertility rates are falling nearly everywhere and the rich world faces a severe shortage of babies. At prevailing birth rates, the average woman in a high-income country today will have just 1.6 children over her lifetime. Every rich country except Israel has a fertility rate beneath the replacement level of 2.1, at which a population is stable without immigration. The decline over the past decade has been faster than demographers expected.
Doomsayers such as Elon Musk warn that these shifts threaten civilisation itself. That is ridiculous, but they will bring profound social and economic changes. A fertility rate of 1.6 means that, without immigration, each generation will be a quarter smaller than the one before it. In 2000 rich countries had 26 over-65-year-olds for every 100 people aged 25-64. By 2050 that is likely to have doubled. The worst-affected places will see even more dramatic change. In South Korea, where the fertility rate is 0.7, the population is projected to fall by 60% by the end of the century.
The decision to have children is a personal one and should stay that way. But governments need to pay heed to rapid demographic shifts. Ageing and shrinking societies will probably lose dynamism and military might. They will certainly face a budgetary nightmare, as taxpayers struggle to finance the pensions and health care of legions of oldies.
Many pro-natalist policies come with effects that are valuable in themselves. Handouts for poor parents reduce child poverty, for instance, and mothers who can afford child care are more likely to work. However, governments are wrong to think it is within their power to boost fertility rates. For one thing, such policies are founded on a false diagnosis of what has so far caused demographic decline. For another, they could cost more than the problems they are designed to solve.
One common assumption is that falling fertility rates stem from professional women putting off having children. The notion that they run out of time to have as many babies as they wish before their childbearing years draw to a close explains why policies tend to focus on offering tax breaks and subsidised child care. That way, it is argued, women do not have to choose between their family and their career.
That is not the main story. University-educated women are indeed having children later in life, but only a little. In America their average age at the birth of their first child has risen from 28 in 2000 to 30 now. These women are having roughly the same number of children as their peers did a generation ago. This is a little below what they say is their ideal family size, but the gap is no different from what it used to be.
Instead, the bulk of the decline in the fertility rate in rich countries is among younger, poorer women who are delaying when they start to have children, and who therefore have fewer overall. More than half the drop in America’s total fertility rate since 1990 is caused by a collapse in births among women under 19. That is partly because more of them are going to college. But even those who leave education after high school are having children later. In 1994 the average age of a first-time mother without a university degree was 20. Today, about two-thirds of women without degrees in their 20s are yet to have their first child.
Some politicians may seize on this to aim baby-boosting policies at very young women. They may be tempted, too, by evidence that poorer women respond more to financial incentives. But focusing on young and poor women as a group would be bad for them and for society. Teenage pregnancies are linked to poverty and ill health for both mother and child. Targeted incentives would roll back decades of efforts to curb unwanted teenage pregnancy and encourage women into study and work. Those efforts, along with programmes to enhance gender equality, rank among the greatest public-policy triumphs of the postwar era.
Some illiberal governments, such as those of Hungary and Russia, may choose to ignore this progress. Yet they face a practical problem, because government incentives do not seem to bring lots of extra babies even as spending mounts. Sweden offers an extraordinarily generous child-care programme, but its total fertility rate is still only 1.7. Vast amounts of money are needed to encourage each extra baby. And handouts tend to go to all babies, including those who would have been born anyway. As a result, schemes in Poland and France cost $1m-2m per extra birth. Only a tiny number of citizens are productive enough to generate fiscal benefits to offset that kind of money. Due to low social mobility only 8% of American children born to parents without bachelor’s degrees end up getting such a degree themselves.
Older, but wiser
What, then, can governments do? High-skilled immigration can plug fiscal gaps, but not indefinitely, given that fertility is falling globally. Most economies will therefore have to adapt to social change, and it falls to governments to smooth the way. Welfare states will need rethinking: older people will have to work later in life, for instance, to cut the burden on the public purse. The invention and adoption of new technologies will need to be encouraged. These could make the demographic transition easier by unleashing economy-wide productivity growth or helping care for the old. New household technologies may help parents, rather as dishwashers and washing machines did in the mid-20th century. Baby-boosting policies, by comparison, are a costly and socially retrograde mistake.
The empirical fact that pronatalist (aka family-friendly) policies have not yet had a strong effect, only means that the dosage so far has been too low.
If South Korea should introduce a lump sum of USD 70.000 per child (interesting factoid, thanks) and even that turns out not to be enough, increase to USD 100.000. Still not enough? Go to USD 150.000. And so on. Sooner or later South Korea (and elsewhere) is likely to get an effect of the desired size.
It costs money? Sure. But a state can always afford what it gives the highest priority.
If voters do not regard higher fertility as a high-enough prioritized goal: fine. (Not least since there are quite good arguments for embracing global population decline.) But that is not the same as to say that the goal is impossible to achieve through government incentives.
For a more cost-efficient way to reach higher fertility than the South Korean reform proposal, consider the "target the third child" suggestion I describe in another comment to this blog post.
2. Even if they were, your logic would not hold, because the fact that they are willing to spend money once they are alive does not mean that they would use that money to stay alive--- it just means they want to be comfortable.
"But we can get closer if we endow kids with equity, not debt, obligations. Give parents a transferable right to a fixed percentage of the taxes those kids will later pay governments. Parents of kids who will later make more money could sell those rights for more, just as in a free market solution. Market failure problem solved, mostly. This costs governments nothing now, and is a net gain for them later."
Interesting. An unintended consequence could be sex selection for male offspring, since they have higher expected earning potential. Lopsided gender ratios because of a similar dynamic already exist in East Asian countries. Could this become a reality in the West? Probably not, is my guess. But uhm... maybe not make this a World Bank policy requirement for developing countries :)
But the higher the price paid to parents, the more than women' wages will rise relative to men's. Low female wages is in part caused by the fertility market failure.
A woman would be incentivized towards bearing and raising more children, which means less labor market participation, hence less taxes paid by her. [a man in contrast can at most be incentivized to raise children, but never to bear them (though these days, never say never, I suppose)]
So the right to a fixed tax percentage of a daughter would in expectation be less valuable, than that of a son. I do not understand your reasoning. Partly because I don't see the market failure argument (a link would do, if it is described elsewhere). Partly because the grammar in your first sentence is off, adding more ambiguity.
In the welfare theorems, the assertion that agents take prices as given embodies an assumption that all agents are able to trade all good. If you make each agent’s existence a good produced by the parents and bought by the children the proof runs through, but the children must be able to trade before they are born. https://en.wikipedia.org/wiki/Fundamental_theorems_of_welfare_economics
Selecting for male offspring would not be an equilibrium outcome because if males have less offspring than females there is less future income from further descendants. It’s not just the first generation that gets to trade their future income to have themselves born. It’s all future generations. The more future discounted income can be raised from one’s entire future set of descendants, the more they are likely to trade for their existence, so any deviation from evolutionary sexual 50-50 ratio logic would be self-correcting.
"The more future discounted income can be raised from one’s entire future set of descendants, the more they are likely to trade for their existence, so any deviation from evolutionary sexual 50-50 ratio logic would be self-correcting."
That was not the suggestion though. You just get the rights to your children's tax contribution, not of your children's children as well (and all future generations). If you had partial rights to that, it would get complicated as everybody has 4 grandparents, 8 great grandparents.... also, there is time value of money. And you likely won't see your great grandchildren make any money, anyway, so they're somewhat incentive irrelevant.
While Robin did not state that you’ll need also to have further future generation to complete the market that is in fact the case. There’s a market efficiency proof that he didn’t get into has this as a feature.
This is the premise of The Unincorporated Man. Great book. Despite being framed as a dystopia in the story, I actually like it. It's really only dystopian in the same ways any government overreach are dystopian.
You’ve got to hand it to this fellow who argued that it would be moral to painlessly extinguish the universe. Never thought I’d be defending existence at large.
Coming here always feels like being handed a mirror to see around a corner. This is brilliant and makes perfect sense. And will never be implemented because it is a kind of eugenics.
It’s not a kind of eugenics. It’s just outside the Overton window. The main reason it’s outside the Overton window is that it was never tried yet. Nobody knows how it will really play out and people are (somewhat justly) afraid of the unknown.
In Confucian-influenced cultures, it is a requirement that sons take care of their parents in old age (daughters take care of their husband's parents, which contributes towards son preference). Children were (are) also required to obey parents for their entire life, not just care for them in old age. Many cultures around the world developed similar expectations. People needed to have children to be supported in old age. The West is a big exception in this regard.
It is not a big exception in this regard. At least not in the principle that "people need to have children to be supported in old age". Not necessarily their own children, mind you. For example in Germany, it has become a nationalized scheme, where the government taxes young workers and pays out retirement benefits to the old. This of course works perfectly without any issues whatsoever, as Adenauer who instituted it, famously observed "Kinder kriegen die Leute immer.".
Yeah, though it’s probably more of an efficient cultural scheme when the opportunity landscape is stable, but less so when children are likely to be better informed about where to find opportunity in a rapidly changing landscape.
At prevailing market rates, the value of a "transferable kid tax fraction" claim at conception would probably not exceed about 10% of the taxes ultimately owed.
Beyond that, dropping the two-parent assumption opens the door to more efficient market mechanisms: voluntary income contracts for mothers who choose to raise children, potentially financed by wealthy men looking to spread their genes using pre-agreed arrangements. Pavel Durov may be seen as a pioneer, but a legal marketplace would be a game changer.
If legalized, this could constitute the largest voluntary transfer of wealth in history and might even end poverty.
Many governments already incentivise kid production via subsidised education and tax breaks. Are they not doing enough? It seems as though we need some quantitative analysis to compare what is already being paid to parents with what would optimally be paid to parents, under some assumptions about the aims of the government. I note that some governments can obtain more educated adult workers whenever they like via immigration policy changes.
The government does currently pay more for better-educated kids - via student loan forgiveness. The extra money goes to the better-educated kids - and not their parents - but the basic idea is similar - the extra government money goes to fund better-educated families.
Isn't the more obvious market failure the collective action problem of people not having kids themselves but relying on other people's offspring to fund entitlements and maintain society? Maybe the tax asset scheme mitigates that.
N=1 case study. My daughter turned 29 today. She's been married five years. My wife and I gifted them $50,000 toward the purchase of a house, because their rent was being jacked up out of reach. The house won't be great for raising children by modern standards, although our niece and her husband are raising seven fine children in a small 3-bedroom house. Our daughter has a very rich social life of which she is the center. She has a group of ca. 20 friends, all childless, who gather several times a week for games, meals, and movies. She works full time as a fledgling financial advisor. Her husband is self-training in gaming programming, no income. If she conceives today, I will be 90 when her first child graduates high school. Wife and I want to be a part of her childrens' lives. But we feel like any suggestion that she get on with it will be met with resistance. To be a good parent, she and her husband must desire to have children. It's very difficult to see how any govt. intervention changes this, short of something like $10k direct annual payment per child, which would all be borrowed... from her children's future earnings. We could do this for her, but she resists further financial assistance from us.
"Forthwith Ajax, son of Telamon, slew the fair youth Simoeisios, son of Anthemion, whom his mother bore by the banks of the Simoeis, as she was coming down from Mount Ida, where she had been with her parents to see their flocks. Therefore he was named Simoeisios, **but he did not live to pay his parents for his rearing**, for he was cut off untimely by the spear of mighty Ajax, who struck him in the breast by the right nipple as he was coming on among the foremost fighters;"
Iliad, Book 4
Nice!
When your only tool is a free market, every problem is a lack of the right kind of market.
Or something. Trying to say that free market innovations are probably not sufficient to solve this deep cultural problem.
Money can buy culture. https://www.overcomingbias.com/p/we-can-buy-new-culture
Your post at the link is great. I don’t disagree with the more general proposition that money can influence culture. For me it is clear that money and influence in strategic places has moved our culture deliberately in this maladaptive direction you are fighting now. So yes.
I think this ignores the bottom-up problem of cultures that lack culture, while shopping for culture. They don't know what's good for them, by definition. It's the same issue of democracy: It's a great idea, if the electorate has a clue. The electorate has no clue, and so democracy turns into a farce.
To my eyes the real problem with the human species are psychopathic and psychotic traits. Solve those, and many problems fall like dominoes. This won't get solved though, much less because it's difficult, but because these two traits are actually adaptations the species has used, and will continue to use. Being deeply and genuinely good, and being deeply in touch with reality, are both maladaptive to some real degree when contrasted with alternatives(being a highly skilled cheater/having some self-serving but delusional personal narrative that allows you to crush your enemies).
I do say of myself that I would rather not have existed, and in my view it is not the same as being suicidal. If you gave me a button to erase my existence entirely, I would press it, as there would be no further consequences; suicide has a lot of messy consequences for a lot of people beside me.
Beyond that, I feel that the abstract version via taxes is probably to be preferred to a direct debt/claim towards my parents. I can navigate the tax code to my advantage without slighting anyone in particular, while it might be a strain on my relationship with my parents to not be more productive in the personal claim scenario.
So you don't so much mind borrowing if you think you can cheat the lender out of getting repaid?
I would mind that, and in my perfect world lenders would always get repaid. I pay my taxes without tricks, I support my parents and grandparents when needed, insofar as I can, and so far I have donated 20% of my pre-tax income, so I would claim I am not coming from an ascoial place.
But, as you pointed out initially, the deal is in practice not a guaranteed mutually beneficial one and I, as someone claiming to prefer nonexistence, find that I would be the one being cheated here. And I'm not sure the proposed betting market would get around this.
Say there was a perfect 10% prediction for my contract, and I am the unlucky 1 out of 10. I don't quite see why it should be binding to me, if all of the upside is externalised.
At the very least, in line with your proposal (?), you would have to grant children the possibility of rescinding the deal, maybe by choosing some humane euthanasia option.
Parents could get insurance. Maybe some might renegotiate. And then we would probably arrive at an equal situation to what is the case now, where people do what seems about right to them, all things considered. And if the two cases are similar, I would prefer the abstracted version, so my legal bindigs don't sour the emotional relationship with my parents.
Yeah, but maybe the interesting part is that your unborn children would also have to be taken into account. They would be able use their future income to improve your lot in life until it gets you to the point that you decide that life is worth living, thereby having them. To Be Or Not to Be becomes a communal question contemplated in communion with all your potential decedents. Nay, a communal enterprise, a joint venture! - It becomes a cosmic Hamlet organism stretched across space and time, stretched so thin and so far that it resembles a personal god, born just for you, to contemplate your being.
That is an interesting perspective and a nice suggestion to think about things, but it isn't changing my n=1 stance. I am rather comfortable in a materialistic sense, and improving that over time has made no difference in my fundamental philosophical position on my preference for existence.
In fact, it is one major factor in not having children for me. From a personality psych pov, it makes sense that some people are just born with rather weak reward systems, and I think I have drawn one of those straws, and wouldn't want to potentially grant my children the same unfortunate circumstance. Not that it necessarily has to be so, regressionto the mean is a thing. But the chance is greatly increased.
In that way, even when I contemplate in communion, as you suggest, my conclusion remains unchanged.
Perhaps what you require is for future generations to trade in meaning, passing to you a claim on what will make their lives feel meaningful, share in their future wealth of life-satisfaction brain states.
Perhaps, though I find myself more aligned with negative utilitarianism, making sacrifices to make things less disagreeable to me and others here and now, whereas I am fundamentally selfish enough to not hold myself hostage over the maximizing of future experienced meaning.
It is the hallmark of the market’s invisible hand that it brings the selfish to contemplate how to best serve their fellows. The alchemy of markets, if you will.
It's a good idea to give parents the right to a share of their children's future taxes. I think this could do something interesting to educational institutions. Instead of paying a school to teach your child, the school could buy a portion of the future taxes and educate the child in order to increase the school's expected return. This would incentivize educators to teach students useful things.
The educational institution could then sell the rights for a profit, which would fund the educational institution.
Hey, I thought of it first! (but didn’t tell anyone). Great point, if I may still say so. To me this is actually the main reason tradable child tax equity is a sensible policy. It gives educators skin in the game.
From The Economist https://www.economist.com/leaders/2024/05/23/why-paying-women-to-have-more-babies-wont-work
As birth rates plunge, many politicians want to pour money into policies that might lead women to have more babies. Donald Trump has vowed to dish out bonuses if he returns to the White House. In France, where the state already spends 3.5-4% of gdp on family policies each year, Emmanuel Macron wants to “demographically rearm” his country. South Korea is contemplating handouts worth a staggering $70,000 for each baby. Yet all these attempts are likely to fail, because they are built on a misapprehension.
Governments’ concern is understandable. Fertility rates are falling nearly everywhere and the rich world faces a severe shortage of babies. At prevailing birth rates, the average woman in a high-income country today will have just 1.6 children over her lifetime. Every rich country except Israel has a fertility rate beneath the replacement level of 2.1, at which a population is stable without immigration. The decline over the past decade has been faster than demographers expected.
Doomsayers such as Elon Musk warn that these shifts threaten civilisation itself. That is ridiculous, but they will bring profound social and economic changes. A fertility rate of 1.6 means that, without immigration, each generation will be a quarter smaller than the one before it. In 2000 rich countries had 26 over-65-year-olds for every 100 people aged 25-64. By 2050 that is likely to have doubled. The worst-affected places will see even more dramatic change. In South Korea, where the fertility rate is 0.7, the population is projected to fall by 60% by the end of the century.
The decision to have children is a personal one and should stay that way. But governments need to pay heed to rapid demographic shifts. Ageing and shrinking societies will probably lose dynamism and military might. They will certainly face a budgetary nightmare, as taxpayers struggle to finance the pensions and health care of legions of oldies.
Many pro-natalist policies come with effects that are valuable in themselves. Handouts for poor parents reduce child poverty, for instance, and mothers who can afford child care are more likely to work. However, governments are wrong to think it is within their power to boost fertility rates. For one thing, such policies are founded on a false diagnosis of what has so far caused demographic decline. For another, they could cost more than the problems they are designed to solve.
One common assumption is that falling fertility rates stem from professional women putting off having children. The notion that they run out of time to have as many babies as they wish before their childbearing years draw to a close explains why policies tend to focus on offering tax breaks and subsidised child care. That way, it is argued, women do not have to choose between their family and their career.
That is not the main story. University-educated women are indeed having children later in life, but only a little. In America their average age at the birth of their first child has risen from 28 in 2000 to 30 now. These women are having roughly the same number of children as their peers did a generation ago. This is a little below what they say is their ideal family size, but the gap is no different from what it used to be.
Instead, the bulk of the decline in the fertility rate in rich countries is among younger, poorer women who are delaying when they start to have children, and who therefore have fewer overall. More than half the drop in America’s total fertility rate since 1990 is caused by a collapse in births among women under 19. That is partly because more of them are going to college. But even those who leave education after high school are having children later. In 1994 the average age of a first-time mother without a university degree was 20. Today, about two-thirds of women without degrees in their 20s are yet to have their first child.
Some politicians may seize on this to aim baby-boosting policies at very young women. They may be tempted, too, by evidence that poorer women respond more to financial incentives. But focusing on young and poor women as a group would be bad for them and for society. Teenage pregnancies are linked to poverty and ill health for both mother and child. Targeted incentives would roll back decades of efforts to curb unwanted teenage pregnancy and encourage women into study and work. Those efforts, along with programmes to enhance gender equality, rank among the greatest public-policy triumphs of the postwar era.
Some illiberal governments, such as those of Hungary and Russia, may choose to ignore this progress. Yet they face a practical problem, because government incentives do not seem to bring lots of extra babies even as spending mounts. Sweden offers an extraordinarily generous child-care programme, but its total fertility rate is still only 1.7. Vast amounts of money are needed to encourage each extra baby. And handouts tend to go to all babies, including those who would have been born anyway. As a result, schemes in Poland and France cost $1m-2m per extra birth. Only a tiny number of citizens are productive enough to generate fiscal benefits to offset that kind of money. Due to low social mobility only 8% of American children born to parents without bachelor’s degrees end up getting such a degree themselves.
Older, but wiser
What, then, can governments do? High-skilled immigration can plug fiscal gaps, but not indefinitely, given that fertility is falling globally. Most economies will therefore have to adapt to social change, and it falls to governments to smooth the way. Welfare states will need rethinking: older people will have to work later in life, for instance, to cut the burden on the public purse. The invention and adoption of new technologies will need to be encouraged. These could make the demographic transition easier by unleashing economy-wide productivity growth or helping care for the old. New household technologies may help parents, rather as dishwashers and washing machines did in the mid-20th century. Baby-boosting policies, by comparison, are a costly and socially retrograde mistake.
All of this is true.
However:
The empirical fact that pronatalist (aka family-friendly) policies have not yet had a strong effect, only means that the dosage so far has been too low.
If South Korea should introduce a lump sum of USD 70.000 per child (interesting factoid, thanks) and even that turns out not to be enough, increase to USD 100.000. Still not enough? Go to USD 150.000. And so on. Sooner or later South Korea (and elsewhere) is likely to get an effect of the desired size.
It costs money? Sure. But a state can always afford what it gives the highest priority.
If voters do not regard higher fertility as a high-enough prioritized goal: fine. (Not least since there are quite good arguments for embracing global population decline.) But that is not the same as to say that the goal is impossible to achieve through government incentives.
For a more cost-efficient way to reach higher fertility than the South Korean reform proposal, consider the "target the third child" suggestion I describe in another comment to this blog post.
1. People aren't convinced by logic. Here is an example of a winning argument. https://ishayirashashem.substack.com/p/look-at-cute-babies
2. Even if they were, your logic would not hold, because the fact that they are willing to spend money once they are alive does not mean that they would use that money to stay alive--- it just means they want to be comfortable.
"But we can get closer if we endow kids with equity, not debt, obligations. Give parents a transferable right to a fixed percentage of the taxes those kids will later pay governments. Parents of kids who will later make more money could sell those rights for more, just as in a free market solution. Market failure problem solved, mostly. This costs governments nothing now, and is a net gain for them later."
Interesting. An unintended consequence could be sex selection for male offspring, since they have higher expected earning potential. Lopsided gender ratios because of a similar dynamic already exist in East Asian countries. Could this become a reality in the West? Probably not, is my guess. But uhm... maybe not make this a World Bank policy requirement for developing countries :)
But the higher the price paid to parents, the more than women' wages will rise relative to men's. Low female wages is in part caused by the fertility market failure.
A woman would be incentivized towards bearing and raising more children, which means less labor market participation, hence less taxes paid by her. [a man in contrast can at most be incentivized to raise children, but never to bear them (though these days, never say never, I suppose)]
So the right to a fixed tax percentage of a daughter would in expectation be less valuable, than that of a son. I do not understand your reasoning. Partly because I don't see the market failure argument (a link would do, if it is described elsewhere). Partly because the grammar in your first sentence is off, adding more ambiguity.
In the welfare theorems, the assertion that agents take prices as given embodies an assumption that all agents are able to trade all good. If you make each agent’s existence a good produced by the parents and bought by the children the proof runs through, but the children must be able to trade before they are born. https://en.wikipedia.org/wiki/Fundamental_theorems_of_welfare_economics
I don't grok his reasoning yet, after all then. Thank you for the pointers, though.
Selecting for male offspring would not be an equilibrium outcome because if males have less offspring than females there is less future income from further descendants. It’s not just the first generation that gets to trade their future income to have themselves born. It’s all future generations. The more future discounted income can be raised from one’s entire future set of descendants, the more they are likely to trade for their existence, so any deviation from evolutionary sexual 50-50 ratio logic would be self-correcting.
"The more future discounted income can be raised from one’s entire future set of descendants, the more they are likely to trade for their existence, so any deviation from evolutionary sexual 50-50 ratio logic would be self-correcting."
That was not the suggestion though. You just get the rights to your children's tax contribution, not of your children's children as well (and all future generations). If you had partial rights to that, it would get complicated as everybody has 4 grandparents, 8 great grandparents.... also, there is time value of money. And you likely won't see your great grandchildren make any money, anyway, so they're somewhat incentive irrelevant.
While Robin did not state that you’ll need also to have further future generation to complete the market that is in fact the case. There’s a market efficiency proof that he didn’t get into has this as a feature.
This is the premise of The Unincorporated Man. Great book. Despite being framed as a dystopia in the story, I actually like it. It's really only dystopian in the same ways any government overreach are dystopian.
hilarious, good to see all the death wish listees get in first
You’ve got to hand it to this fellow who argued that it would be moral to painlessly extinguish the universe. Never thought I’d be defending existence at large.
Coming here always feels like being handed a mirror to see around a corner. This is brilliant and makes perfect sense. And will never be implemented because it is a kind of eugenics.
It’s not a kind of eugenics. It’s just outside the Overton window. The main reason it’s outside the Overton window is that it was never tried yet. Nobody knows how it will really play out and people are (somewhat justly) afraid of the unknown.
Well yes, but actually no. Thanks for responding though.
In Confucian-influenced cultures, it is a requirement that sons take care of their parents in old age (daughters take care of their husband's parents, which contributes towards son preference). Children were (are) also required to obey parents for their entire life, not just care for them in old age. Many cultures around the world developed similar expectations. People needed to have children to be supported in old age. The West is a big exception in this regard.
It is not a big exception in this regard. At least not in the principle that "people need to have children to be supported in old age". Not necessarily their own children, mind you. For example in Germany, it has become a nationalized scheme, where the government taxes young workers and pays out retirement benefits to the old. This of course works perfectly without any issues whatsoever, as Adenauer who instituted it, famously observed "Kinder kriegen die Leute immer.".
Yeah, though it’s probably more of an efficient cultural scheme when the opportunity landscape is stable, but less so when children are likely to be better informed about where to find opportunity in a rapidly changing landscape.
At prevailing market rates, the value of a "transferable kid tax fraction" claim at conception would probably not exceed about 10% of the taxes ultimately owed.
Beyond that, dropping the two-parent assumption opens the door to more efficient market mechanisms: voluntary income contracts for mothers who choose to raise children, potentially financed by wealthy men looking to spread their genes using pre-agreed arrangements. Pavel Durov may be seen as a pioneer, but a legal marketplace would be a game changer.
If legalized, this could constitute the largest voluntary transfer of wealth in history and might even end poverty.
Many governments already incentivise kid production via subsidised education and tax breaks. Are they not doing enough? It seems as though we need some quantitative analysis to compare what is already being paid to parents with what would optimally be paid to parents, under some assumptions about the aims of the government. I note that some governments can obtain more educated adult workers whenever they like via immigration policy changes.
The government does currently pay more for better-educated kids - via student loan forgiveness. The extra money goes to the better-educated kids - and not their parents - but the basic idea is similar - the extra government money goes to fund better-educated families.
Isn't the more obvious market failure the collective action problem of people not having kids themselves but relying on other people's offspring to fund entitlements and maintain society? Maybe the tax asset scheme mitigates that.
N=1 case study. My daughter turned 29 today. She's been married five years. My wife and I gifted them $50,000 toward the purchase of a house, because their rent was being jacked up out of reach. The house won't be great for raising children by modern standards, although our niece and her husband are raising seven fine children in a small 3-bedroom house. Our daughter has a very rich social life of which she is the center. She has a group of ca. 20 friends, all childless, who gather several times a week for games, meals, and movies. She works full time as a fledgling financial advisor. Her husband is self-training in gaming programming, no income. If she conceives today, I will be 90 when her first child graduates high school. Wife and I want to be a part of her childrens' lives. But we feel like any suggestion that she get on with it will be met with resistance. To be a good parent, she and her husband must desire to have children. It's very difficult to see how any govt. intervention changes this, short of something like $10k direct annual payment per child, which would all be borrowed... from her children's future earnings. We could do this for her, but she resists further financial assistance from us.