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    39. The Economist’s Guide to Parenting

    Don't let fear of unlikely risks prevent children from enjoying activities with trade-offs. Acknowledge the risks we take as parents and seek help to manage anxiety if necessary. Parenting is about balancing risk assessment and trade-offs, and admitting that risks are inevitable.

    en-usAugust 16, 2011

    About this Episode

    Think you know how much parents matter? Think again. Economists crunch the numbers to learn the ROI on child-rearing.

    🔑 Key Takeaways

    • Parenting can be overwhelming with conflicting advice, but using evidence-based analysis to make decisions can positively impact children's lives.
    • Economists provide a practical approach to parenting by focusing on opportunity cost and efficient use of time and resources. Applying their logical and rational thinking can help overwhelmed parents manage their responsibilities and enjoy the experience more.
    • Even busy economists prioritize parenthood and incorporate their expertise into their parenting decisions. They use their own experiences and research to shape their parenting style, emphasizing the importance of autonomy and addressing sensitive issues like domestic violence.
    • Couples with similar careers and earnings may benefit from considering a partnership instead of marriage, with clearly defined tasks based on specialization. Division of labor in parenting is crucial, with each partner focusing on their strengths.
    • Even with busy professional lives, parents can still spend valuable bonding time with their children by taking advantage of daily tasks and alternative education methods. Investing in early childhood development is an investment in their future success.
    • Parents can provide a nurturing environment, support, and opportunities for their children to thrive, but genetics, environment, school, and friends also play a significant role in their outcomes.
    • The Holt Adoption Agency and twin research have provided economists with valuable data on the effects of parenting and genetics on traits like educational achievement, shaping our understanding of nature versus nurture.
    • While parents do have some impact, studies show that the influence is not as significant as previously believed, and diminishes as children age. Biological children of educated parents are more likely to attend college than adoptees.
    • Obsessive parenting doesn't guarantee academic success. What matters most is the qualities parents pass on to their children. Despite this, childcare time has increased, especially among college-educated mothers.
    • Parents have a greater influence on their children's negative behavior than they realize. Modeling positive behavior can have a significant impact on their children's development and well-being. Focus on controlling what you can control and lead by example.
    • Don't let fear of unlikely risks prevent children from enjoying activities with trade-offs. Acknowledge the risks we take as parents and seek help to manage anxiety if necessary. Parenting is about balancing risk assessment and trade-offs, and admitting that risks are inevitable.
    • Taking risks with our children may be necessary, but being kind and responsible is also crucial. It's important to make informed decisions, weighing the risks involved and doing what is best for our children.
    • Investing time and effort into children can lead to positive outcomes, but overinvestment can lead to negative returns. Approach parenting with a balanced perspective and aim for happiness rather than a high return on investment.
    • Economists often struggle to implement what they believe is best due to social pressure and personal costs. A more relaxed parenting approach can be just as effective, and costly activities aren't always necessary for a happy child.
    • According to Caplan, parents should let their children watch TV and play video games, and cut out activities no one enjoys. By taking a relaxed approach, both parents and children can be happier.
    • Focus on building strong, nurturing relationships with your children instead of trying to shape them into something they're not. Children thrive on love and acceptance, not pressure and manipulation.
    • Loving your child is the key to being a good parent, and being a responsible parent while finding happiness in the journey can lead to well-adjusted children. Guiding parents with strict guidelines may not be effective.
    • Parenthood can bring adventure and learning opportunities but can also contribute to stress and guilt. Deciding to have children should be based on personal reasons and expectations. It's possible to be just as happy parenting, but it comes down to managing anxiety and guilt.
    • Sometimes, the best thing parents can do for their children is to step back and let them learn from experience. Rather than imposing our own opinions and interests on them, we should encourage them to find their own passions.

    📝 Podcast Summary

    The Benefits of Evidence-Based Parenting

    Parenthood may be challenging but the most perplexing part is probably the abundance of conflicting expert advice. Throughout history, popular parenting experts have banned bananas and forbid parents from hugging or kissing their children, with no scientific evidence to back up their claims. In today’s hyper-competitive world, parenting has become a sport with expert advice everywhere, often contradicting each other. So how can we know what’s really good for our children? Enter the economists! By applying evidence-based analysis to parenting decisions, including weighing the costs and benefits of different options, parents can make informed decisions that positively impact their children's lives.

    The Benefits of Applying Economic Concepts to Parenting

    Economists can offer unique perspectives on parenting due to their logical and rational thinking. With their emphasis on opportunity cost, they offer a refreshing approach that can benefit parents who are overwhelmed or feel like they need to invest all their time and energy into their children. For example, Bryan Caplan argues that being a great parent is less work and more fun than we think, and Melissa Kearney translates economic concepts like opportunity cost into parenting discussions with her children. Even though they may not be the ideal parents themselves, economists offer valuable insights into how to effectively manage limited time and resources as parents, especially for those with more than one child.

    Economists' Balancing Act: Parenting and Career

    A group of economists share their experiences of being parents and their approach to balancing their career and family life. They discuss how their expertise in economics has influenced their parenting decisions such as teaching their children about the subject and the importance of autonomy. They also delve into their research on topics such as divorce and its impact on domestic violence. Despite their busy careers, they prioritize their role as parents and find ways to make it work, whether it's writing parenting books or spending more time on it than their research. Ultimately, they learn from their own experiences and apply their knowledge to their parenting style.

    The Financial and Bonding Benefits of Choosing Partnership over Marriage

    Marriage may not always be financially beneficial, especially for couples with similar careers and earnings. Stevenson and Wolfers opted for a partnership instead, with clearly defined tasks based on specialization. They saved over $20,000 a year by not getting married, which they believe outweighed the benefits. However, they have a stronger bond through parenthood, which serves as a better deterrent to separation. Stevenson prepared for pregnancy like any other project, with attention to fitness, diet, and ovulation. Division of labor is crucial in parenting, with Stevenson focusing on inputs like breastfeeding, while Wolfers handles outputs like diapers.

    Prioritizing Quality Time with Young Children: Tips for Busy Parents

    Parents can prioritize quality time spent with their young children, even while balancing busy professional lives. Tasks like changing diapers and spending time with a nanny can provide valuable bonding opportunities. It's important to consider alternative education methods, such as teaching sign language to babies, to promote early language development. Classes like music and art can also provide positive intellectual stimulation. Ultimately, investing in a child's early development is an investment in their future human capital accumulation, demonstrating the importance of prioritizing quality time with young children.

    Parents' Role in Children's Upbringing

    Despite all the efforts put in by parents like investing in organic foods, sign language, and other behavioral habits, economics research suggests that parents do not have much influence on their children’s upbringing once they are out of the womb. This counterintuitive conclusion is backed up by data showing that genetics, environment, school, and friends are equally important in children’s lives. However, economists like Steve Levitt and Joshua Gans caution against ignoring parents altogether. Rather, they argue that parents can “set the stage” by providing a nurturing environment, support, and opportunities for their children to thrive. In other words, parents’ role is an important one, but its impact on children’s outcomes may not be as significant as we may think.

    Accidental Experiments Reveal Influence of Parents on Human Development

    Through accidental experiments in adoption data and twin research, economists are able to isolate the influence of parents on traits such as educational achievement. The Holt Adoption Agency's policy of first-come, first-served placements allowed a sample of adult adoptees to be randomly assigned to different types of families, providing valuable data on nature versus nurture. Meanwhile, twin research enabled economists to measure the extent to which genetics actually matter in shared traits, leaving room for researchers to study parental influence. These accidental experiments have yielded useful data on the influence of parents on a wide range of traits, including educational achievement, and have offered insights into how genes and environment interact to shape human development.

    The Limited Influence of Parental Factors on Children's Education and Income

    Despite our best efforts, the influence of parents on their children's intelligence, education and income is smaller than we may think. Adoption studies show that while parental influence does exist, it is far smaller than we would expect, and often diminishes as the adoptees get older. The data shows that even in advantaged families, the biological children of college-educated parents are 75 percentage points more likely to attend college than their peers from low-education families, while the adoptees - even in the most advantaged family - are only 16 percentage points more likely to attend college. Similarly, parents have a moderate effect on early income but virtually no effect later in life.

    The Truth About Culture Cramming and Obsessive Parenting

    Obsessive parenting has few rewards and there is no evidence to support the idea that culture cramming is correlated with academic success. What matters most is who parents are; not what they do. The kind of parents who are likely to buy parenting books and do all that culture cramming are high-achieving parents to start with, and those are the qualities that their kids inherit. However, despite the opportunity cost of time, the amount of time that parents spend on childcare has been increasing since the 1990s and has skyrocketed in the 2000s, especially among college-educated moms.

    The Importance of Modeling Positive Behavior for your Children

    Parents today are caught in the rug-rat race, chauffeuring their kids to various extracurricular activities in the hopes of securing a good college admission. However, this often leads to added stress and tension in the family. While it may seem like good parenting, research shows that parents have more influence in negative behaviors such as smoking and drinking, which kids tend to pick up from their parents. It is imperative that parents model positive behavior in their interactions with others as this behavior is also contagious. While parents may not be able to protect their kids from all the external threats, modeling positive behavior is something within their control and can have a positive impact on their children's development.

    Understanding Risk Assessment in Parenting

    Parents often worry about unlikely risks like kidnappings and guns, when statistically, swimming pools and skiing pose greater dangers. The fear stems from our poor ability to assess risk as humans. It is important to acknowledge the risks we take as parents, but not let them prevent children from experiencing enjoyable activities with trade-offs. If anxiety persists, it may be helpful to seek ways to cure oneself of anxiety problems. Ultimately, parenting is a balancing act of risk assessment and trade-offs, and admitting that risks are inevitable is a difficult but necessary reality.

    Balancing Risk and Parenting

    Taking risks is a part of our daily lives, and as economists, we are comfortable with thinking about risks and making decisions based on them. This includes taking risks with our children's lives, like Joshua Gans, who used a tough tactic to teach his child the importance of leaving the park on time. While it may seem harsh, sometimes raising the price enough and being credible is necessary. However, it's important to note that being kind is also crucial. It's possible to balance taking risks and being kind and responsible parents. Ultimately, it's about making the right decisions for our children while also acknowledging the risks involved in our everyday lives.

    The Impact of Nurture on Children: Balancing Investment and Expectations

    The impact of nurture on children is significant and long-lasting, even into their elderly years. However, parents need to approach parenting with realistic expectations and aim for happiness rather than a high return on investment. Investing time and effort into children can lead to positive outcomes, but overinvestment can lead to negative returns and dissatisfaction for both parents and children. Parents should invest until the margin of return is zero while avoiding a negative margin of return. Economists, who have studied the costs and benefits of parenting, often don't follow their own advice and are subject to engaging in parental behaviors that data suggest are not worthwhile. It's important to approach parenting with a balanced perspective and realistic expectations.

    The Gap Between Perception and Reality in Economics and Parenting

    Research shows that human perception often differs from reality, even among economists. While economists may understand what actions are best, they may not always follow through due to social pressure and personal costs. Even economists can struggle to break away from societal norms and expectations, particularly when it comes to parenting. The tradeoff between obsessive parenting and a more relaxed approach can affect a child's happiness and achievement. Importantly, expensive activities may be unnecessary for achieving happiness, and a more laid-back approach can provide just as much enjoyment. Understanding these differences between perception and reality can help us make more informed decisions, especially when it comes to parenting.

    Bryan Caplan on Reality-Based Parenting

    In a Reality-Based Parenting movement, Bryan Caplan is a strong contender for president due to his book 'Selfish Reasons to Have More Kids: Why Being a Great Parent Is Less Work and More Fun Than You Think.' Caplan advocates for parents to let their children watch TV or play video games, and to get rid of extraneous activities that no one enjoys. The research suggests that becoming a parent can decrease overall happiness, but Caplan believes this is due to parents stressing themselves out over everything. By taking a relaxed approach to parenting, Caplan believes that both parents and children can be happier.

    Why Prioritizing Positive Relationships with Children is Key

    Bryan Caplan believes that parents should prioritize warmth and positive relationships with their children over pushing them towards specific achievements or activities. He is critical of the idea that parents should force their children into music lessons or other activities they themselves enjoy, as this can lead to resentment and rebellion. Caplan cites a Swedish twins study as evidence that nurturing and kindness have a lasting impact on how children perceive and remember their parents. Instead of treating their children like science projects to be manipulated, Caplan suggests that parents should accept their children as separate individuals with their own desires and needs.

    The Importance of Balancing Responsibility and Happiness in Parenthood

    The key to being a good parent is simply loving your child. However, some may argue that there should be a set of standards or qualifications to become a parent to ensure proficiency in parenting. Despite this, forcing parents to adhere to strict guidelines goes against American values and might not necessarily lead to better outcomes for children. Instead, it's important to find a balance between being a responsible parent and not becoming an obsessive one. Research suggests that the happiest parents tend to have the most well-adjusted children. So, in the end, it's not about being a perfect parent, but rather finding happiness in the journey of parenthood.

    The Pros and Cons of Parenthood: Exploring the Cost of Happiness

    Despite data suggesting that people with children are less happy than those without, some parents find the adventure and learning experience of raising children to be worth it. However, the stress, anxiety, and guilt that often come with parenting can contribute to the happiness hit. Justin Wolfers and Betsey Stevenson believe that by parenting without anxiety and guilt, they can be just as happy as they were before having kids. Ultimately, the decision to have children comes down to expectations and personal reasons, such as the desire for adventure or a paternal instinct. While the cost of happiness may be high for some, others find the benefits to be priceless.

    The Importance of Giving Kids Space to Discover the World on Their Own

    In parenting, it's easy to get lost in self-deception while trying to raise our kids. But sometimes, the best thing we can do for our children is to leave them alone to discover the world on their own. We may have strong opinions about what's best for them, but ultimately they need to learn through experience. And while it's natural to want to relate to our kids through common interests, we need to remember to give them space and let them find their own passions. So, to all the strange economists and their kids out there, let's check in with each other in a few years and see how our little ones turn out.

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