Children as a Consumer Good vs a Producer Good

Canadian Capitalist wrote an excellent post about the cost of children. As someone who doesn’t have children (and doesn’t really expect to) you might think I wouldn’t have anything to add on this topic.

You’d be wrong.

An interesting article I came across (sorry, can’t find it again to provide a link) was about the idea that historically children were a “producer good”, that is they were an investment that you expected would pay you money over time. In the early years you invest your time and resources into a baby, and as they get older they’re able to contribute an ever-increasing amount back to the family (by working the farm, helping with the family business, etc). There’s risk to the investment (it’d be ghoulish to list them all), but the expectation is that you’d more then get paid back your early investment. To this day, in developing countries large-families are often a way for parents to insure that SOMEONE will take care of them in their old age. I briefly dated a woman who’s parents came from an African country, and whenever they had an expense in their lives (like putting in a new deck at their house), they’d hit the kids up for a contribution towards it.

A Chinese woman I talked to gave all her salary to her parents, who “invested” it for her and provide her with room and board. From a parents’ perspective this sounds like a pretty sweet deal, but I wouldn’t want to be the child!

In the west in modern times, children have instead been viewed as a consumer good (costs us money we don’t expect to recoup). The general view is that a child adds far more enjoyment to your life then the monetary costs. Mike from Four Pillars comments that he’s spending time with his girls instead of “expensive dinners, sporting events, booze etc.” and he doesn’t seem to regret it (so therefore he values the time spent with his children more then what he’s given up, i.e. they’re worth more to him then these things). These days often parents are providing housing or a monthly allowance for grown children, and in many cases are reasonably happy to do it.

Something being a consumer good isn’t a bad thing. If it adds more enjoyment to your life then the other things you could purchase (for an equivalent price) with your discretionary income, then its a very wise purchase. I hope that every potential parent weighs the cost/reward of having a child and makes the right decision for the lifestyle they want. In my view a lot of misery is added to the world by parents’ NOT making this decision (and instead allowing random chance to dictate their lifestyle for the next 18 years).

I love kids and when I spend time with them I definitely find it enjoyable (they have a really unique perspective on life and say things that really make you question some of your most basic assumptions). My one fear with having my own children is that its a consumer good with a “no returns” policy :-).

5 replies on “Children as a Consumer Good vs a Producer Good”

CC: I agree with the view of society’s perspective on citizens (there’s probably an interesting view of the trade off between higher birth-rate and immigration as methods for increasing the population of tax payers).

If you agree that children WERE producer goods, and that they no longer are in some places (such as Canada), what are they now?

Is there no way the “innate desire to reproduce and have a family” can be compared to the innate desire to kick back with a beer in front of a massive plasma?

*grin* I realize this post might not be terribly amusing to a new parent. I meant no disrespect, its just one perspective (an economic one, that I find interesting) on the decision to reproduce.

Perhaps I should keep my mouth shut on the parenting issue until / if I’m in the club 🙂

I disagree with the view that children are consumer “goods”. We have children because we have a innate desire to reproduce and have a family, not for considerations that they will bring us more joy than a big screen plasma TV.

It is true that in the past (or even now in some societies) children were viewed by families as future producer goods. But how different is it from modern society, which looks at children as future taxpayers who will support our aging population? From the perspective of a large society, children today are what they always were – producer goods.

Very interesting post.

spending time with his girls instead
Makes me sound like Hugh Hefner 🙂 I actually only have one boy.

Don’t give up on the kid, family thing – I got married when I was 36 and had a kid at 37 so not everyone does things at the “normal” ages – whatever those are.


Mike: I am still on the fence somewhat with the kid thing. My girlfriend is firmly opposed, which is what has me leaning in that direction. If she was wildly enthusiastic about having kids I could probably be talked into it (although it would certainly postpone early retirement).

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