Million Dollar Babies

The biggest potential cost for most couples would be the woman giving up employment for years. But that’s not mentioned and so I disbelieve that quarter-of-a-million bucks. Phooey!

(Caveat: I have no feeling for the US cost of healthcare.)

Like you say, something has to give:

http://facingzionwards.blogspot.com/

“Raising children is one of the most fundamental and rewarding experiences of life….” The aforementioned begs a societal question WRM – are families with children essential to health of societal organization in all stages of development (leaving aside societal replacement issue)? What is at issue is cultural – valuation of families to societal vibrancy and provision thereto of a tax stream that supports social services. Essentially, you infer both economic and cultural considerations vis-a-vis integral American family formations.

An important factor, probably the most important after secure access to good healthcare, is work-family balance.

US companies and US capitalism generally are notoriously bad at helping young families to achieve this balance.

The nordic countries, by contrast, have focused on this, with good results, achieving significantly higher fertility rates than for Europe and (non-hispanic, non-afr-amer) America.

There’s a solid, thorough cross-national comparison here of four approaches to family policy and fertility: the nordic, anglo-saxon, southern european and east european models. Go to page 64 and look at the fascinating graph on page 65:

http://www.thefamilywatch.org/doc/doc-0198-es.pdf

The upshot is that the US is clustered in the lower right hand quadrant, ie very late intervention to support working families, and most of the money being wasted on an underperforming, underclass-heavy educational system.

The nordic countries intervene very early, providing the bulk of the benefit to working mothers of children under the age of three – and they have better results in terms of reducing poverty, increasing fertility, and ensuring a good environment for raising children successfully.

From the report:

“in the nordic countries, support to working mothers seems to be sufficiently prolonged, diversified, and continuous over the course of family life to allow a substantial proportion of women to participate in the
labor market full-time even during the period of family formation.

“The work/family balance is initially achieved by major state intervention to provide a complementary mix of generous parental leave payments to secure household
income for the period directly following a birth. This is followed by a relatively prolonged supply of affordable childcare services and direct income transfers to the family.

“The widely accepted justification for this high level of support is to achieve the combined objectives of child education, adult autonomy, and gender equity.

“Households can rely on a diverse set of resources that help to secure their transition into parenthood and into employment. in particular, women are encouraged to find a job and to keep it, even after the birth of children, although the effective tax bill that has to be paid as a counterpart is relatively high.

“Investments of this kind—the provision of affordable childcare, income support, and secure income during parental leave—may lower poverty rates and raise female employment. Flexible work-time practices also
contribute to achieving a balance between work and family…”

/end excerpt

Note: you can’t fund this without taxing people adequately. We can have a stable and broad middle class, or an hourglass social distribution with a few wealthy yuppies at the top and a massive underclass on the bottom. Take your pick, folks.

Michael@6: To put it another way, the average family could supposedly wind up with an extra half a million dollars by not having children.

“What numbers like these tell us is that our society is profoundly dysfunctional. We have organized ourselves so poorly that the most basic and fundamental thing a human society must do — produce the next generation and prepare it for adulthood — is becoming harder and harder with each passing year.”

It makes for some interesting social science though. For instance, at the end of ‘Soviet genocide’ in 1991, Latvia had 16 births per 1000 population. It is now just above 8/1000 population.

Deaths there now exceed births by over 1.5 to 1.

Capitalism triumphs over life itself!

@thibaud:

Compare the price of healthcare for kids to the price of healthcare for seniors — then come back to us with an intellectually honest assessment of what the major problems really are. (And no, counting daycare as “health care” doesn’t count.)

Try it — at least it would give you a chance to deviate from your Talking Points.

When my father was a young man he often supplemented the family’s meager food budget by hunting deer. It was cheap to do this many years ago. Eventually, as the population and regulations grew it became more and more expensive. In later years he lamented that what had once been a poor person’s way of eating had become a rich man’s sport. The price per pound of harvesting a deer now handily exceeds that of the finest cut of beef from the grocer, and the cut of beef I used to buy a few years ago at the grocer for $2.99/lb on sale is now $6.99/lb. (on sale!). Very soon eating beef will be only for the well to do and eventually eating anything will be only for the well to do. Ask a North Korean. Of course cars and kids will be priced out of reach.

thibaud@7: “The nordic countries, by contrast, have focused on this, with good results, achieving significantly higher fertility rates than for Europe and (non-hispanic, non-afr-amer) America.”

I’m all for a discussion on how to encourage “family formation”, but almost all sources I can find seem to contradict your claim. The US non-Hispanic White total fertility rate actually seems to be higher than the Nordic ones.

rkka@11: “Capitalism triumphs over life itself!”

If you love Latvia, re-impose the Communist dictatorship!

Sorry, but the “cost to raise a child” should be better labelled “how much American families spend on average.”

Here’s the report: http://www.cnpp.usda.gov/Publications/CRC/crc2011.pdf

For instance, clothing = statistics on how much the average family spends on children’s clothing. Transportation costs = split average transportation costs into family-related travel and work/commute travel; then prorate the family-related travel based on the assumed number of people in the family. Housing = cost of a child is the average cost of an additional bedroom, assuming that children don’t share bedrooms.

As a result, I find this study quite misleading.

Here’s what I’d really like to see: statistics on who’s having children, by ethnic group, economic status, and region of the country. Near as I can tell, there are segments of the population for whom the idea of having a child is alien and larger segments for whom that’s a normal part of being an adult (with or without spouse), with no economic calculus involved.

@Elizabeth. Thank you. You said it better than I could have. One of the other things to remember is that studies like this also have tons of bias front-loaded in to them. Surveys are sent out, people choose to fill them out or not – voluntary response and non-response bias.

Based on surveys filled out, people are selected to continue with quarterly surveys both on paper and via phone or in person for two years. This is random sampling of an already biased overall sample. It will lead to over and under sampling of various demographics.

Because this is about spending habits, you will also end up with those who exhibit a “social desirability bias” in how they answer their questions. Sure my kids wear Nikes. I get them at the thrift store, outlet store or whatever, but I’ll put down full price because that’s how much I could have spent.

I also dislike how they subdivide the results into only three income categories. That is going to skew results.

The main driver behind costs of raising a child going up? Commodities prices going up because gas and energy prices going up. That will impact housing (utilities), food, transportation and clothing.

The assumption everyone has is that kids come with no unexpected problems, such as dvelopmental disabilities. However, the rate of such problems, if all labels and degrees of severity are lumped together, is about one in six, and so the impact should not be ignored. The cost–to families and to society–of a significantly disabled child is far greater (and not just in financial terms).

For a contrarian argument, maybe this is the appropriate way to reduce the birthrate on the left side of the bell curve.

http://heartiste.wordpress.com/2012/06/13/automation-and-redundant-humans/

@thibaud I’m with you on severing health care from employers. I’ve always been a little baffled as to why the business community doesn’t make more noise on this issue — wouldn’t it help the bottom line tremendously not to have to deal with all the bureaucracy associated with maintaining these complex systems?

But you lose me when you propose basically putting everybody on Medicare, i.e., going to a Canadian-style system.

I was born and raised in Canada, and their system has its pros and cons as the US system does. But other than our current Democratic leadership, who are either disingenuous or uninterested in the cost of Obamacare (“you have to pass the bill to find out what’s in it”), does anybody believe that going to a single-payer system would actually cost *less*? It doesn’t really matter what’s ideal — we’re already insolvent!

I’ve never understood why a significant tax break incentive to purchase health care couldn’t be the solution, rather than the behemoth that is Obamacare. Provide people with deep incentives to purchase health care. If they refuse the incentives and prefer to rely on government health care/Medicare, then fund the system with the revenues brought in by their refusal to take advantage of the tax break. Tax breaks for Republicans! Safety net for Democrats! Everybody wins!

I don’t buy the argument that the private sector can’t compete with a public option in health care. Private universities compete with public ones. Those who are willing to pay more for (ostensibly) higher quality make that choice. Perhaps the same dynamic would work in health care — with the crucial element that nobody would be *compelled* to choose one over the other.

RE: Single Payer Government Healthcare:

The difficulty is that that kind of “reform” is going in the opposite direction from where we need to be.

I know, it seems like centralizing everything simplifies it. It doesn’t; it only makes bad/ignorant decision-making systemically impossible to work around.

Look at it this way: A lot of people complain about HMO’s, because in fact HMO’s are quite stupid ideas.

For the most part they aren’t insurance at all; insurance is a small amount you pay to guarantee a big payout in the event an unlikely event happens.

But health coverage is largely for doctors’ appointments and counteracting the effects of old age and paying for the medical costs of procreation and the like…and none of THAT is unexpected or unlikely!

So health “insurance” is mostly not insurance at all; mostly it’s a pre-pay system wherein you pay someone else money for services that you aren’t buying just now but know you’re going to need before long or on a regular basis. It’s not like auto accident insurance; it’s like pre-paying for oil changes.

Now the really stupid thing about this is they resulting dynamic: Person X pays an HMO in advance. Then, when he needs medical services, he goes to the HMO and…does what, exactly? He begs them to give him back the money he paid them earlier, in the form of paying for the services he needs!

And their incentive to do so is somewhat mixed: On the one hand, if they get a rep for denying claims, they’ll lose customers. On the other hand if they are too soft, they’ll be giving out a lot of money they currently have in their hands. So if the payment looks like a good way to keep the client HEALTHY and reduce long-term care costs, they pay…but if it looks like an expensive way to make them live longer, leading to more expenses later, the incentive is largely against keeping the customer alive.

Fortunately the wish of an HMO to have certain customers die early is counterbalanced by their wish for good PR and not getting sued. So their responsiveness to the euthanasia incentives is curtailed.

Now consider what happens if government becomes your HMO: You get all the same problems: You pay a third party to hold on to your money in the hopes they’ll release it later when you want it used for treatment.

But now, there is no competition, and little hope of lawsuits. Now, there is nothing to curtail the euthanizing incentives. Nothing to make the government work hard to “keep your business” and provide you great “value for your money.”

It’s basically a way to create a monopoly HMO. Dumb move.

No, the best practices would be something like privately-owned HSA’s (Health Savings Accounts, or Medical Savings Accounts if you prefer) combined with catastrophic expense coverage (real “insurance”), wherein the consumer makes their own decisions and shops around and compares the real price of Procedure X between one doctor and another.

This, helpfully, takes the “middleman with perverse incentives” out of the picture. Being private, the HSA’s are inheritable, and you can loan or give from one person’s HSA to another. You could have government do a kind of “matching” like employers do for 401K’s, means-tested, to help make it easier for the poor to rapidly build up the contents of their account.

And if you’re worried about older people’s accounts running out before they die, you can make care cheaper for older folks by having the government partially refund health expenses for anyone who’s already outlived the mean life expectancy for people born in their birth year. If they’ve outlived it by 1%, they get a 1% reimbursement; if by 10%, a 10% reimbursement. If the mean life expectancy for folks born in their birth year is 75 and they live to be 150, then God bless ‘em, they’ve outlived the mean by 100% and all their healthcare is on the house from now on.

But for the normal working stiff, he should have his own medical money saved up and he should pay it directly to his doctor.

Prices would fall like a rock, bureaucracy would be slashed, and allocation of resources would improve.

From page 11 of the report: “As previously discussed, child care and education was the only budgetary component for which many households had a zero expenditure and the others had a positive expenditure. The USDA
estimates include only families with expenditures on this budgetary component. For the middle and highest income groups (for households with the expense), child care and education was the second largest expenditure on a child, accounting for 18 and 23 percent of child-rearing expenses, respectively. For the lowest income group, child care and education accounted for 14 percent of total child-rearing expenses (again, for households with the expense).”