7 Mar 2013

Are kids the solution or the problem?

Last fall, I asked my students to recommend policies that would promote long-term thinking for sustainability and fighting climate change by lowering people's discount rates.

Several gave this simple and powerful answer:
Encourage people to have more children.
Now this conventional wisdom relies on the notion that parents look farther into the future due to their stronger interest in "intergenerational equity," i.e., a planning perspective that includes their kids' lifespans.

But I wonder if it's really good to encourage people to have more kids than they would on their own:
  1. First, because more kids stress resources and the environment.*
  2. Second, because it's not hard to think of parents with kids who are LESS, not MORE, likely to think of the future. This is especially true in LDCs, where parents break laws and take big risks to feed their kids. They are not just using more resources; they are taking bigger risks with the resources they have.
  3. Third, parents with more kids have fewer resources (time and money) to help those kids eat, learn, etc. If they grow up "hungry and stupid" then they may do more damage.
So why do governments subsidize children (via tax deductions, free education, income supports, etc.)?

I can see a few winners:
  • Priests who want more tithing faithful on earth and souls in their heavens
  • Politicians who want more voters
  • Generals who want more soldier
  • Businessmen who want more customers
But I don't see any positive impact on resources or the environment. Do you?

Bottom Line: Governments should tax -- not subsidize -- children to promote sustainability.

* Julian Simon argues that "humans" are the ultimate resource. That's true in terms of a Smithian "deepening" of the market, but not in terms of multiple markets, each with heavy resource needs.