The French government recently proposed that parents lose some of their welfare and other benefits if their children miss too many days of school. This is part of the government's response to the series of riots in their segregated suburbs by children of mainly Muslim immigrant families (Posner and I discussed aspects of these riots a couple of weeks ago). The proposal raises important questions about the obligations and responsibilities of parents for their children‚Äôs upbringing and behavior.
My view is that it is essential for governments to use both the "carrot" and the "stick" to encourage parents to control more closely various aspects of their children's upbringing that can harm both the children and society at large. The French proposal is aimed in particular at the high rate of school dropouts and irregular school attendance among immigrant African children who live in low income and high crime suburbs. The lack of marketable skills, along with the highly regulated and rigid French labor market, contribute to an unemployment rate among these youths that some French economists estimate at over 40 per cent. A large fraction of African immigrant young men and women have never held a regular job. It is debatable how much their unemployment and low earning potential contributed to the riots- I believe it played some role. But it is not debatable that their lack of education and training, combined with the serious defects of the French labor market, has condemned these children to a bleak economic future.
Clearly, not all children-immigrant or native born- will benefit from a university education, or even from completing secondary school. This presumably is why the French government has also proposed combining incentives for better parental monitoring of school attendance for younger children with greater availability of vocational education for children aged 14-16. But more or less everyone can benefit in the modern knowledge-based economy from a basic education through the ninth grade or so. And children should be able to get a decent education through these grades so that they find out if they are suitable or interested in pursuing their education much further.
The French government provides rather generous benefits to immigrant and other poor families through welfare programs, sizable subsidies to families that have two or more children, earned income credits, and in other ways. To earn full benefits, the new proposal would require parents to monitor their children sufficiently to see that they attend school regularly. The government could also reduce benefits to parents of children between the ages of 14 and 17 if the children commit crimes and engage in other types of anti-social behavior. After seventeen, the children are essentially adults, and are often beyond parental control.
An alternative to punishing parents would be to give poor parents bonuses from the state- to use the "carrot" instead of the "stick"- when their children attend school regularly, do well at school, do not engage in delinquent behavior, get regular health checkups, and the like. A large-scale program along such lines that covers over two million families, called Progresa, has been operating in Mexico for over a decade, while Brazil and several other countries have similar programs.
In the Mexican program, mainly poor rural families receive a monthly stipend for each of their children between the ages of about eight and fourteen that do not miss many classes (teachers keep attendance records), do reasonably well at school, go for regular health checkups, and meet a few other criteria. The stipends are a little larger for girls since they traditionally receive much less schooling in these rural families. This program aims to reduce child labor and further the education of poor children by giving parents a financial incentive to keep their children in school much longer than has been common. Mexico already has minimum schooling laws, but the government is reluctant to punish poor families who violate these laws by sending their children out to work instead.
Economists both inside and outside of Mexico have evaluated the effects of Progresa. Readers can consult studies by Orazio Attanasio, Costas Meghir, and Ana Santiago, by Petra Todd, and by Rodrigo Garcia Verdu. The evidence is rather clear that Progresa has reduced child labor and raised schooling levels of children in the program, especially among girls, compared to a more or less random sample of families who were used as controls. Progresa is pretty expensive and a full benefit-cost evaluation requires more years of data. Still, the program appears to have been a success, although it could be designed to be more effective per peso spent. By that I mean changing the format to give parents the greatest benefits if they keep their children in school at those ages where children are most likely to drop out of school.
The situation of French children of African descent is not the same as poor rural Mexican children. For one thing, children of African immigrants who skip school usually either are not working, or are engaged in the drug trade and other illegal activities. Yet the principle is the same, that parents should be held accountable for school attendance and other behavior of their children. They can be held accountable either by being financially punished when their children misbehave, the French proposal, or by receiving extra payments when their children do better, as in Progresa. I would improve on the French approach by following the philosophy behind the Mexican program, and give financial bonuses to families whose children attend school and do reasonably well there. I would add to the proposal that benefits be increased when children do not get into trouble with the law for committing crimes or for engaging in other anti-social behavior.
Of course, giving a financial supplement for good behavior rather than docking families for bad behavior puts greater strain on the government's budget. I suspect this is the reason why the French chose financial punishments since they have been running a sizable budget deficit. However, by reducing a little the typical welfare and other benefits paid to families, the unused tax revenue would be available to reward poor families whose children do particularly well.
There is no reason why programs like Progresa should be restricted to developing nations or to immigrant families. The US could usefully adapt such a program to the needs of poor children from ghettos and elsewhere. For example, poor families could receive benefits when their children attend high school regularly or until graduation, and if the children do well in their classes and on tests. This should improve the attendance of these children and reduce dropout rates. It would also encourage parents to be active in forcing improvements in the schools their children attend so that they can do better on state-wide and other tests.
If the nation as a whole benefits from children's education--that is, if the educated child does not capture the full benefit of his education in the enhanced earnings that the education enables--that is a ground for coercing or otherwise inducing the parents to make sure that their children do not play hooky more than occasionally. Or if parents are irresponsible in the sense of not being faithful fiduciaries of their children, so that they underinvest in the children's education from the children's own (mature) standpoint, as by failing to prevent them from playing hooky, there is again a ground for state intervention.
These concerns provide an economic rationale for compulsory school attendance laws (although the actual historical purpose of those laws was to prevent competition from child labor for adult workers) and hence for laws against truancy. And it has always been recognized that these laws cannot be enforced without parental cooperation, which has sometimes itself to be coerced. All U.S. states, as far as I know, require parents, under pain of fines and even prison sentences, to make their children attend school. I imagine, without having being able to discover, that France has similar laws, in which event the proposal that Becker discusses to dock parents of truants some of their welfare benefits is an alternative method of enforcement--or perhaps just a grandstand gesture.
America's inner cities have the same severe truancy problems as the Muslim slums in France, without having the same riots, so I am skeptical whether the French proposal, even if it is intended seriously, will do much if anything to calm those slums and head off future riots. In fact, the proposal if implemented might well increase tensions. Some, maybe most, of the poor parents in those slums cannot control their children, so they will lose welfare benefits for no purpose--and will simply be poorer, which may make them even less able to control their children. In the United States, and at a guess in France as well, much truancy consists of skipping classes at school rather than not showing up at school. The kids are hanging around at the school, but they are not attending classes. It may be that there is little that most parents can do to prevent that behavior, as distinct from forcing their children to go to the school premises--though even that may be impossible for many parents. And if parents are poor, the fact that their children's truancy is reported to them by the school's truant officers will not necessarily enable them to make the children behave by withholding allowances, toys, or other privileges from them--the children may have very few privileges to begin with, because of their parents' poverty.
The experience in both countries is that laws against truancy are severely underenforced despite parental responsibility, perhaps because parents simply are not effective truant officers. If this is correct, the French proposal even if implemented will not have significant effects.
Slightly more promising, perhaps, is the "carrot" approach that Becker also discusses. This would be a way of getting more money to poor families with an incidental if perhaps slight increase in school attendance as a side effect. But again I am skeptical. I am not familiar with the Progresa program that Becker describes, but it strikes me as potentially very wasteful, depending on the ratio of "good" kids to truants. Suppose that 90 percent of kids of poor parents are good and 10 percent are truants, and that the effect of the program is that 10 percent of the truants become good kids. Then 91 percent of the parents would qualify for the benefits, but only 1 percent would have earned them by changing their children's behavior. To exaggerate, suppose that the government gave everybody who doesn't steal a bicycle $10 a year. Since most people don't want to steal bicycles, the program would be very costly relative to its behavioral effect.
Many good comments; I have time to respond only to a few of them.
One comment quite rightly points out that the estimate of 50 million dead in the Spanish flu pandemic cannot be right if the mortality rate was 1 percent--50 million is 1 percent of 5 billion, which was more than twice the world's population in 1918 and of course not everyone in the world was infected. The studies I've seen give a lower bound estimate of the number who died as 20 million, which if correct surely implies a mortality rate greater than 1 percent. It is estimated that about a quarter of the U.S. population, or 25 million, were infected; and 500,000 died--that is 2 percent.
Several comments emphasize that the problem of vaccine production from the manufacturers' perspective is that property rights are likely to be threatened in a pandemic--hence the threat to Roche of compulsory licensing. That risk cannot and probably should not be eliminated, and so the answer may be to compensate manufacturers for the risk by subsidizing vaccine R&D. Beyond that, as another comment remarks, when a vaccine has to be created in a hurry because a new virus has appeared, the risk of side effects cannot be calculated and incorporated into the sale price; this is an argument for the government's sharing the risk through some scheme for indemnifying some of the liability costs of the manufacturers of the new vaccine.
A number of comments discuss the distinction I made in the Orphan Drugs posting of the previous week between economics and utilitarianism. (In fact the Orphan Drug and avian flu topics are closely related; both are about potential problems in the production of drugs, and they are quite similar problems--in the Orphan Drug context stemming from the small size of the market relative to the fixed costs of a new drug, and in the avian flu context to the small size of the market as a result of the fact that a flu vaccine may be good for only a single flu season, or indeed may have no market at all if the flu that it is designed to prevent doesn't materialize to the point where people will bother to be vaccinated.) Economics is a social science and utilitarianism is a philosophy, but they do share the word "utility," used however in different senses. Economists usually distinguish between "value" and "utility" merely to bring attitude toward risk into the analysis: the value of a 10 percent chance of $100 is $10, but the utility may be less for a risk averse person (hence the market for insurance) and more for a risk preferrer (hence the appeal of gambling). Economic value with or without attitude toward risk is different from utility in the utilitarian's sense, as the former is strongly influenced by wherewithal. If I have only $1 and a life-saving drug would cost $2, then the value of the drug to me is only $1, though the utility in the sense of the happiness I would derive from the drug would be vastly greater. So there would be a utilitarian argument for the government's subsidizing my purchase of the drug, but not necessarily an economic argument. I emphasize "not necessarily," however, because there may be an economic argument for the subsidy, based on insurance or altruism notions, but it would be more complicated than the utilitarian argument.