A new idea

Don’t you wish every blog post had that title?  Dream on.  Here goes:

The key intuition is that the rise in relative earnings of wives increased competition between spouses for the love and affection of their children while the decline in family size reduced competition between children for resources from their parents. The combined effect has empowered children within the household and allowed them to capture an increasing share of the household surplus over the past hundred years.

That is from Galiani, Staiger, and Torrens, it is new to me at least.

Comments

Can you you imagine the surplus capture in China during the one child rule years? With grandparents living there too?

"Gimme an ocean! I demand an ocean!"

"Will you settle for the South China Sea?"

It is called East Sea.

Since you're being pedantic, it's also called the South Sea and the West Philippine Sea.

No, it is not. The Vietnamese call it the East Sea. Because it is at the east and it is a sea.

"No, it is not. The Vietnamese call it the East Sea. Because it is at the east and it is a sea."

And some Filipino's call it the "West Philippine Sea", just as Trotters stated.

https://en.wikipedia.org/wiki/South_China_Sea

The Vietnamese claim is the right one.

Now he's a pro-Vietnamese troll, too? weird combination.

I support the Vietnamese people against the Chinese aggressor.

It is called many things by the many peoples who live around it.

Right. Not sure if they factor the prevalence (50%) of single-parent households due to divorce; children without marriage; etc.

Otherwise, it's one or two children; two parents (each with income); four grandparents; baby-sitters/nannies; aunts and uncles with no children; . . .

LOL, Thor. Good one there.

That's very funny. I am not sure internal competition is the driver though, because pampered pets. I think it is just rich society nurturing, along with some more outward looking status competition.

The correlating pet effect is found in China as well.

http://money.cnn.com/2014/10/23/luxury/china-pets/

To the extent that this is an individual family effect, you could try to test it by looking at families with working and non-working moms, controlling for everything else you could. But it honestly looks like a society-wide effect, so it seems pretty hard to test.

'Don’t you wish every blog post had that title?'

No. Some people also admire the truth, which is not a new idea at all.

Sometimes the truth is old. Sometimes it's new.

Sometimes it is borrowed, sometimes it is blue.
Sometimes it is rubber, sometimes it is glue.

Zappa has a lyric for any situation!

So, has anyone observed a family where the undivorced parents are competing with one another for the love and affection of their children? By independently lavishing goods upon them, one-upping each other? I suppose there may be cases of this, but a widespread phenomenon that can explain spending trends?

That was exactly my reaction. I have a lot of failings as a parent, but letting my kids play one parent against the other is not one of them - my wife and I are very good at anticompetitive agreements in restraint of trade.

We mostly keep it at conscious parallelism in our little duopoly.

A lot of times both working parents will spend lavishly on their kids-- partly using objects or travel or other experiences as substitutes for quantity of time spent with their kids. "Quality time" just doesn't go far when there isn't much quantity of time spent with kids.

If parents do this, it does not necessarily mean they are competing with one another. They may both just be in agreement, about spending in accord with their rising standard of living and with their wishes to somehow make up for lack of time with their kids.

There was a Doonsbury cartoon recently reprinted where Rick and Joanie are new parents trying to achieve work/life balance and share parenting responsibilities. Rick commits a Kinsley gaffe of explaining that he doesn't share his wife's stress because he feels that he's spending more time with his kid than his father did, while she naturally feels guilty because she is spending less than her mom.

Competition may be a strong word, but in some ways parents compete with their memories of their own parents.

I make 133% of what my wife makes. We don't explicitly compete on anything w.r.t. our 4 kids. We certainly don't compete via material gifts.

However, there may be a subtle competition around which of us the kids would say is more awesome. :)

I don't think I buy it. Why would earnings specifically increase the competition? And would that mean that when wives earned less, or in families with stay-at-home moms, the husband dominates in the affection competition because he earns so much more? That is certainly not my experience.

I am sure I once read a sentence about women's romantic preferences that went more or less like "being interesting is good, but having a good income is even better". To be frank, half the people I know probably have to bribe their dogs ro like them. Nowadays there are many unlikeable persons around.

No kidding there, Thiago.

Maybe if the guys are billionaires, otherwise I think it is BS. Create a profile for someone earning like 350k/year and see how many people apply to go out with you. Probably women are intimidated because they don't qualify under assortive mating rules requiring them to earn the same amount.

I was thinking the opposite: when dad is at work and mom is home with the kids, mom naturally gets most of the kids attention/affection. When both parents work all day, there is more competition.

That makes more sense. Not much point in trying to compete when you start out so far behind. Better to spend the money on beer. But if it's a closer contest, it might make sense to put a lot of resources into it.

That would require some oddness in the "desire for love and affection of children" curve, and the "returns to spending resources on winning love and affection" curve. Perhaps if we can't be the favorite, we are fairly indifferent to any other level of love/affection above that given to "non-abusive father who supports his family."

Perhaps if we can straighten out our fiscal policy, trade will take of itself. Even though we import billions of dollars of goods and services, other countries buy our debt, not our goods and services. They prefer steady stream of income to trade. This is the real cause of our job drain. Balancing the budget but should come first. This is lost on the media.

I'm not going to spend $5 of my hard earned money to purchase this paper!!! Unlike Professor Cowen, I don't have free access to NBER papers so I have to pick and choose carefully what to purchase (markets for everything, including research papers!!).

Though it is an 'n = 1', it certainly was not the experience of our family. Both my wife and I worked the entire time our two daughters were growing up save some time taken off for maternity leave. I can tell you bluntly that our daughters were in no way empowered to capture the increased surplus of household income. We fed them gruel for breakfast and made them pack their own school lunches and even forced them to do homework. My goodness, it was an almost Dickensian upbringing. I don't know how they even made it through college.

Papers such as this one always make me think that there is such a thing as 'junk science.'

"The key intuition is that the rise in relative earnings of wives increased competition between spouses for the love and affection of their children while the decline in family size reduced competition between children for resources from their parents. The combined effect has empowered children within the household and allowed them to capture an increasing share of the household surplus over the past hundred years."

May I suggest and alternate interpretation? I haven't read the gated paper so, take it with a grain of salt.

Perhaps a rise in earnings is correlated with wives working outside of the home. And in those cases, it's possible that the parents spent more money on the kids (daycare, baby sitters, camps, VBS, additional money for food expenses for all of these, better clothes, etc) directly because of limited time and also indirectly (toys, books, video games) as compensation (and guilt) for the children not having a stay at home mom.

It could be a variant of what someone observed with regards to the paper about economic growth and population age: household production of services (there, childcare) is not included in GDP.

Here, non-monetary resources spent on children isn't (and probably can't be) measured. If a parent doesn't work and spends 8 hours playing with their kids, that isn't reflected as spending on the children. But if that parent works 8 hours and spends 50% of that income on nicer toys (or paying someone else to play with their kids), it is reflected in spending.

Perhaps a very rough way to get at this would be to count the opportunity cost of being a stay-at-home parent as money spent on the children?

Good point. If they're counting daycare, baby sitters, camps etc. as part of the expenses, that would account for a huge part of the difference there. Especially since the wife making more money often means her working more hours and having less flexibility in being able to e.g. stay home with a sick child than if she were working part time in a position of less responsibility.

I'd say Dad's contribution wouldn't differ, but I can see Mom feeling a bit guilty and compensating for it. Also, if a family is wealthier, it has more to spend on luxuries. Makes sense the kids get more, even as a percentage of household budget.

Many years ago I was involved with an only. I cannot imagine a worse experience. But I've never had leprosy.

Or, child labor laws and legal birth control mean that children are a family's ultimate "luxury/status good". Endless ways to further invest.

So glad economics as a field of study doesn't have many big, extremely important, unsolved problems, on which opinion is sharply divided. Because researchers can profitably focus their efforts on questions like these. We already have enough people successfully warning of financial crises.

(Almost all) people have always loved their kids, and (almost all) people want to treat the ones they love well, and lately people have been able to afford to do so. I don't see the need to invent a new idea when the old one works perfectly well.

Yeah maybe. Unfortunately the way it manifests itself is there are more 34 year old "kids" living in their parent's basement blogging online in their underwear.

Actually I'm 32.

So am I, but I post on my briefs.

still technically underwear

Sir, only wasteful people set the heating to be able to keep warm in underwear during Winter. The rest of people sets the heating to 16-18°C and wears warm socks and a comfy cashmere sweater ;)

There something wrong when you have a system like this pumping out students writing research projects like this.

POW as someone who doesn't have kids I can really see this. Even families with lower income spend a huge amount on stuff for their kids. Toys I would have never have had growing up, huge parties that I might have seen in my youth for someone's Bar Mitzvhah or comining out party but instead for simple birthdays. High end amusement parks, game places etc.

Kids like me but other people scoff when I tell them the kids are conspiring to replace us and move us out of the picture. They have nonetheless captured an outsized portion of our economic output. A vast conspiracy indeed.

Divorce. Inability to physically discipline children anymore. That is a necessary precursor towards managing entities with no assets (ie nothing to loae).

It’s always great to dream big, but we need to make sure that we work hard enough for achieving it. I don’t think it means anything to dream big without substance, so always vital to work hard and that too with strategy in order to succeed. I am able to do it all nicely through OctaFX broker, as they help me big time with low spreads, high leverage, bonuses, 24/5 support and much more, it’s all how I can feel comfortable.

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