Green-tinted Glasses

It never ceases to amaze me how some videos are able to induce strong waves of emotion in the short span of less than 5 minutes, while some movies are unable to even after 2 hours of trying.

This video set me thinking about the future of children in the vastly different society that we live in today, compared to say, my parents’ time in the 70s’. The changing economics of marriage has been analysed and debated over by economists like Tim Harford (The Logic of Life) and intellectuals at Cato Unbound, but most of the analysis has been focused on Mom and Dad - what about their children?

The findings are basically that the entry of women into the workplace has screwed up the traditional ‘division of labour’ in marriage - men in the office and women in the kitchen - and it is leading to a shift from productive to hedonistic marriage. That means that instead of finding a soulmate who you feel you can work with, you find one whom you can play with - shared consumption instead of shared production.

The result is a higher equilibrium divorce rate than before, due to a myriad of factors: “no fault” laws which facilitate an easier divorce and decreased dependence on your spouse. I say equilibrium because divorce rates has hit its peak in the US and now falling. In other countries though - particularly Asian ones - divorce rates are still on the increase.

Harford argues that it is a price worth paying: the empowerment of women has encouraged men to behave, resulting in a decrease in domestic violence and happier marriages (for those that do last). But is this increase in adult happiness offset by a decrease in child happiness? Have we underestimated the costs on the children in the marriage, as well as the hidden costs on the children who are not yet born, and who never will be, as a result of declining marriages and incentives to have children?

I examine two possible consequences for children of the changed economics of marriage:

1. Sadder children

Consider the possibility that the high costs of divorce in the past were actually more accurate in reflecting the costs of divorce, and the current low-cost divorces actually underestimate its true cost. Why? Because of the costs it imposes on the children, which the couple may not have fully taken into account. In this sense, the high cost of divorce may have acted as a kind of Pigouvian tax, trying to take into account costs that may have been overlooked. And now that these costs have been removed from consideration, the likely outcome is that adults get a divorce even when the costs (on the family as a whole) outweigh the benefits (for the adults). In economic jargon, we see a net transfer of happiness from children to adults, with deadweight losses as well.

Secondly, while the happier marriages that Harford talks about should logically result in happier children, the changing household dynamics may negate this. The traditional family model with one spouse at home and the other in the workplace has served children well. But while the women have since flocked to the workplace in droves, traffic on the other end from husbands going home has been much lower. The result is more double-income households - good if you are an economist obsessed with GDP - but not so good for the children alone at home. In the long run, the cliche that ‘children are the future generation’ still applies, and the economy of tomorrow suffers. Kay S. Hymowitz put it:

Parents do not simply “provide childcare;” they shape children to become spouses, parents, citizens, and workers adapted to their specific cultural and economic world…by socializing children to be self-sufficient, entrepreneurial, flexible workers as they are doing so intensively today, parents are also creating that economic environment.

2. Less children

The conventional argument is that less-binding marriages are beneficial to all: both men and women are free to walk out of the relationship instead of being trapped. But this has also served to increase the cost of having children: it adds responsibility on the couple to stay together, something which they may not have considered when exchanging rings.

With working females, the costs are multiplied due to workplace discrimination. While there may be sexism at work in the form of employers not liking women in the office, most of this “discrimination” is rational: if you take, or are likely to take, half a year’s leave off work at any given time, the bosses are not likely to promote you over someone who is able to fully commit to the job all year. This disincentive to promote women has transferred itself to a disincentive to have children. And how do women send out an effective signal to employers that they won’t be taking maternity leave in future? Simple: don’t get married in the first place. Indeed, marriage statistics have been dismal in recent years.

Thus we see how the disincentive to employ women has shifted to the disincentive to marry at all. On the outset, everyone’s a winner: the workforce becomes larger, women are empowered, bosses are happy. That’s simply because the losers in this situation - the unborn babies - don’t have the chance to cry foul, or even exist. And their cries will only be heard in the minds of old men and women when they are spending their retirement years alone at home, and in the minds of government economists trying to find people to tax to support the aged.

We can perhaps see a glimpse of the future by looking at two relatively small but highly modernised economies. The economic success of Japan and Singapore, both with a large female workforce, have so far concealed an insidious problem that is now of increasing concern to both governments: falling birth rates that are well below that needed to sustain the population, not to mention support the aging. The Japanese government has taken action by offering more child-care facilities and other benefits for working mothers; the Singaporean method is more innovative, if slightly cynical: “import” the extra population needed from other countries.

I can only thank God that I was born earlier rather than later. Happy childhoods look like they’re becoming increasingly scarce.