Economically, every society needs children.
Children are the producers of the future This means that children are in a sense a necessary economic good. [Update: I mean “good” in the sense of a created product like steel, not in the sense of a positive or negative] A society that does not produce enough children, or that cannot produce enough children who grow into economically productive adults, is doomed to poverty. Every long-term investment we make, whether in the private or public sector, is predicated on the idea that there will be a future generation which will actually produce a return. It doesn’t matter what economic or political system rules the present, it will need children to secure its future. Even the most self-centered individual would eventual realize that if the next generation cannot produce, his own welfare will suffer.
So, collectively we all need children and benefit when they grow into productive adults, but the cost of raising children is increasingly being borne by fewer and fewer in the general population.
Childless adults are rapidly becoming economic free riders on the backs of parents.
In the pre-industrial era, children almost always contributed to the economic success of the family directly. Agriculture depended heavily on the labor of children, and children brought further benefits by extending support networks via marriages. In the industrial era, however, children began to contribute less and less while consuming more and more. Nowadays, children usually return very little if any economic benefit to the parents.
Being a parent costs one economically. Although we socialize some cost, such as education, parents pay most of the cost of raising a child. Parents also lose out in non-monetary ways such as in a loss of flexibility in when and where they work. If an individual sets out to maximize his lifetime income, avoiding having children would be step one.
In our atomized society, children do not provide a boost in status, networking or security that offsets their very real cost. I think this economic loss may explain why many people shy away from having children. Many people simply do not want the loss of status that will come from having their disposable income consumed by rug rats.
Like all free-rider situations, this one will eventually cause a collapse that hurts everyone. As the percentage of parents in the population shrinks, the cost of being a parent will rise. More and more people will be tempted to conserve their own resources and let someone else shoulder the burden of creating the next generation. Eventually, the society will either produce too few children or, probably more likely, will not produce enough children with the skills and habits needed to carry on the economy
There is already grousing in some blue zones by the childless that they shouldn’t have to subsidize the “breeders'” children. How long before child-hostile places like San Francisco become the norm?
I’m not sure how to address this problem from a public-policy perspective, but the next time you run into someone bragging because he chose not to have children, call him a parasite and see how it works out.
[Update: In looking at the comments I thought I would make some points more explicitly.
(1) This is an argument about economic behavior. Individuals may or may not have what others would think of as valid personal reasons for not having children but that is irrelevant to the economic argument.
(2) Except for some trivial income tax deductions, parents pay all the taxes that the childless do plus all the significant cost of rearing the children. Children provide no economic return to their parents. The entire population benefits from the productivity of the next generation but only parents pay the very real economic cost of creating the next generation.
(3) History has shown that individuals will gravitate towards the wealth maximizing behaviors in the short-term even if every individual understands that long-term the behaviors will be self-destructive for everyone. The free-rider problem is just the inverse of the tragedy of the the commons. The only difference being that instead of consuming a resource free-riders avoid expending resources. In the modern world, childlessness maximizes an individual’s wealth. It is reasonable to presume that more and more people will avoid having children in order to maximize their own individual wealth. This is a textbook free-rider problem.
(4) Carried to extremes, this free-rider problem could have significant economic consequences. If productivity growth does not match the shrinking population then the economy will falter.
(5) My “parasite” label was directed at those who are arrogantly proud of their childless status and contemptuous of parents. Their attitude is all the more grating because most of them are Leftist who demand that the state coerce my children into paying for their retirement.]
[Update 2006-03-03 18:38:09: I find it interesting that although I make no policy recommendations in this post, many commentators feel free to criticize me for the recommendations they imagine I imply, some even go so far as to evoke Reductio ad Hitlerum.
Secondly, people who claim that the childless subsidize the children of the parents misunderstand the matter on two points: (1) In this context, any subsidy that the childless provide in the form of taxes, which parents do not also pay is trivial. Stop deluding yourself. You’re making out like bandits. (2) We are talking about economic return here, not quality of life. Children today provide no significant economic return to the parents. So, even if the childless were providing a significant subsidy to parents that wouldn’t provide any economic benefit to the parents. The disparity in wealth that drives the free-rider problem would still exist.]
[Update 2006-03-03 18:38:09: whoops, the next to last line of the previous update should read So, even if the childless were providing a significant subsidy to children that wouldn’t provide any economic benefit to the parents]
[Update 2006-03-03 18:38:09:You can often identify a free-rider problem by asking the simple question, “what would happen if everybody chose the suspected free-ride?” For example, suppose the fire department was supported purely by voluntary contributions. If everyone contributed equally, the fire department could function to some level. If everyone chose not to contribute it couldn’t. Not contributing to the fire department while others did would be a free-ride.
The same applies to child rearing. If every adult cranked out at least one kid, that might cause its own set of problems but we could confident that the human race and the economy would continue to survive. However, if every adult sought to maximize their own short-term economic benefit by avoiding the cost of rearing children, then the economy would eventually collapse.
Clearly, not having children and assuming the real cost of turning a fetus into an economically productive adult is a free-ride in the economic sense.]
[Update 2006-03-03 18:38:09: I have made another post with more thoughts here.]