November 06, 2005
Child Care and Work Leave--Posner's Response to Comments
One commenter suggests that low fertility is due to the reluctance of a couple to give up the second income (normally the wife's) if the couple has a child and as a result one of the parents (normally the mother) leaves the labor force. This has always been true; but in the old days, women's job opportunities were limited, so that the income they had to give up when they dropped out of the labor force in order to have children was usually quite small. This is another way of saying that the opportunity costs (alternative income forgone) of having a child have risen for women, so, naturally, the "output" of children has fallen. Now, this would not necessarily happen if, at the same time that children were becoming more costly, they were becoming more valuable to their parents; that is, if the demand curve for children as well as the supply curve were shifting upward. But, especially with the prohibition of child labor, this has not happened. Rather, as Becker has emphasized, there has been a shift in demand from quantity to quality of children. This makes sense if the cost of the extra quality in better schooling, etc., is less than would be the cost of an extra quantity of children--in other words, if the total costs (including opportunity costs) of one high-quality child are now lower than the total costs of two or more lower-quality children.
It may also be the case that, if one thinks of children as being from the parents' perspective a consumption good (like a pet), what has happened is that the market for goods and services is producing better substitutes, at a lower quality-adjusted cost, than in the past, so that the cost of giving up these alternatives in order to invest in children has risen.
A Canadian commenter states that the quality of public day care is, in Canada, higher than that of private day care. If so, however, one wonders what demand there is for private day care--is it that access to public day care is limited and that public day care is of higher quality than private because of high taxation?
Posted by posner at 03:19 PM | Comments (2) | TrackBack (0)
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