Why Economics Falls Down in the Face of Fatherhood

I’ve been a dad now for a little less than two years, and I’m still trying to figure out how it is shaping my approach to economics.  I think the answer is: A lot.

I learned economics in my twenties, before I became a dad. You know the drill: We learned hard math and complex models. Forget the Greek letters, they are just complicated ways of exploring the basic idea informing economics—that people are purposeful, analytic decision makers. And this idea just seemed entirely natural to me. I had always believed in the analytic self; I was rational, calculating, and tried to make smart decisions. Of course real people don’t use math, but I figured that we’re still weighing costs and benefits just as our models say. Or at least that was my understanding of the world.

Today, I’m not so sure.

Justin Wolfers and his daughter Matilda after a White House Easter egg roll.

My feelings toward my daughter Matilda aren’t easily expressed in analytic terms. I struggle to express it, just as I struggle to understand it. I think about my daughter, and I smile. Her laugh is the greatest joy, and it thrills me that she shares it with me. I’m fiercely protective of her, love (as you can tell) talking about her, and she’s central not only to my life, but to who I am. (You can hear more from me and Matilda in the second episode of the hour-long Freakonomics Radio show, “The Economist’s Guide to Parenting.”)

There’s something new and strange about all this. Today, I feel the powerful force of biology. It’s visceral; it’s real; it’s hormonal, and it’s not in our economic models. I’m helpless in the face of feelings that overwhelm me. Yes, I know that a twenty-something reader will cleverly point out that I just need to count kids as a good which yields utility, or perhaps we need to add a state variable to the utility function as in rational addiction models. But that’s not the point. I’m surprised by how little of this I’ve consciously chosen. While the economic framework accurately describes how I choose an apple over an orange, it has had surprisingly little to say about what has been the most important choice in my life.

And it’s not for want of trying. Today, I find myself wondering: Is parenthood a constant returns technology? That is: Would a second child bring as much joy as a first? But how could it? Since meeting Matilda, my heart is bursting with joy.  Will it explode? Are the returns diminishing then? And if so, how fast? Forget self-interest; I’m not the only stakeholder in this debate. Beyond my better half, there’s Matilda, and the dozens of others she has brought joy to—her grandparents, aunts, uncles, and caregivers. There are the old ladies who smile as she walks down the street, the dads I share a knowing glance with, and all the good that will come from whatever lies ahead for my baby.

I’m a committed neoclassical economist. I learned it when I was at a point in my life when rational self-interest (broadly defined) seemed the right way to understand the world. But what kind of economists would we be if we learned our economics only after we were parents? It’s an interesting thought experiment, and truth is, I don’t know the answer. But slivers of evidence—my own introspection, conversations with other economist-parents, and even intriguing research showing the impact that daughters have on Congressman-dads—all tell me that it would be different.

And if you are also struggling to understand these issues: Happy Father’s Day.

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  1. Owinok says:

    Good article Justin. Just wondering how many graduate schools admit students who have had time to work, reflect and form families like you have. Happy Father’s Day.

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  2. caveat bettor says:

    She’s beautiful. I’ve got 3 of ’em, who are beautiful to me (especially when they are sleeping or I am away from them), and I heartily agree with your thoughts and questions.

    I wonder what Bryan Caplan will think about this post. I know he’ll tell you to have more.

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    • 3 boys says:

      Byran Caplan sounds like he is disconnected to his children. I think it is a good idea to pick as many apples as possible and then throw out the bad ones later. But with children, you cannot just say, “I will have 10 kids and if half are very successful, then woo hoo.” What about the other 5?

      I would like to see Caplan and Amy Chua sound off. I would pay to see that.

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  3. Steve says:

    I don’t think the returns diminish with a second child, I think the returns are different. Just like you figured out your worldview is different after fathering a child, your ROI on a second child is based on different criteria than the first one. You have changed, your second child would (will?) be a different person as well. The return you get on your second child will be the return you want from him/her. You’ll make sure of that in one way or another.

    How many of those knowing looks come from fathers of girls and how many come from fathers of boys? I have a boy and a girl and the looks shared by parents of girls are much different and much more common than those shared by parents of boys. Happy Father’s Day.

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  4. Joe K Fobes says:

    “That is: Would a second child bring as much joy as a first? But how could it? Since meeting Matilda, my heart is bursting with joy. Will it explode? Are the returns diminishing then? And if so, how fast?”

    Your heart will get bigger as it did with Matilda. And forget trying to fully understand it (aside from an abstract conceptual understanding), you don’t yet have a big enough heart at this point to feel how it would feel to have a bigger one.


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  5. We have 3 boys says:

    So the 3rd is almost 3 years old and we are not pregant. We joke about trying for a girl, but even if you told me that we had a 100% chance of having a girl if we tried right now, we would probably not take the offer. We like our kids. Even the 3rd boy is a delight. We keep thinking that these boys are just great. At the same time, we are exhausted. We are almost done with diapers. I think if we had a girl, it would be wonderful, and also very exhausting. It would also force us to move to a bigger house. And a bigger house is something that costs money, and money then becomes something that we are forced to consider.

    One more kid, would qualify us for food stamps of about $2,400/year (and who knows what else?), decrease my required payment of student loan payment by $90/month and increase our annual tax refund by $1,365. So that would give us a gross economic benefit of $4,845.

    $5k alone will not do it for us, but if we are willing to make sacrifices, it could work.

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    • Really says:

      If you need food stamps to have another kid DON’T have another kid. Unreal….

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      • Enter your name says:

        A child is normally better off in a low-income family that is organized, stable, and loving than in a high-income family that is disconnected, disrupted or abusive. Food stamps aren’t harmful to children in the way that having parents who are addicted to drugs, in and out of jail, or subjecting the kids to a revolving door of sexual partners is — or in the way that some incredibly wealthy parents are. One of the most heartbreaking stories I heard from a teacher was about a famous actor: his neglected teenage son was about to be kicked out of yet another private school, and all the millionaire actor wanted to know was how big a check he had to write to get the school to keep him enrolled. Not “How’s my son?” or “What can I do to help him?”, but “How much is this going to cost me?”, asked with pen poised over the checkbook.

        Additionally, you’re demanding that they make life-long decisions based on this year’s economic status. If their income is low because they’re starting a new business, because one of them lost a job recently, or because one of them is providing full-time child care, then they might be quite well off in a few years.

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      • 3 boys says:

        @Really. I don’t need food stamps, but I would qualify for them. Do you even know what qualifies you for EBT? There are 5 of us, and if I make less than 51k a year in a family of 5, we qualify for something. If we had a 4th child, the qualification would bump up to 56k, 62k and so on.

        Really, you should “really” do some research before you stick your foot in your mouth. Really!

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  6. Bill says:

    Joe K Fobes is right, and if my experience is typical perhaps the greatest reason to have a second child (aside from using him/her to help keep your first in check down the road) is because the way your capacity for love increases — even though you can’t possibly imagine it right now — is the closest thing to magic on Earth. It sounds corny and completely inappropriate for an economics-themed blog, but is in fact completely true.

    Oh, just be prepared to never sleep again.

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  7. Matthew says:

    Something I have not yet seen is the value of passing on your genetic material. There is infinite value in that; genetic material not passed on to subsequent generations is lost forever. All species have a need to achieve immortality through reproduction so even though it is not part of your conscious thinking, you as a person realize value from her existence.

    While children can be evaluated from a cost-benefit economic analysis, the fact that the value of this intangible cannot be quantified makes this discussion difficult.

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  8. Marcus Kalka says:

    This was a well-written introspective entry. As an economist more along the lines of the Austrian School, I believe there is something to be said for biology in economics. If we forget about the biological aspects with respect to economic theory, it’s as if we’re tying our hands behind our back.

    What kind of economists would we be if we learned our economics only after we were parents? I’m not sure, but probably much more practical and pragmatic ones. When the bottom line means food on the table, it influences our economic decision-making. With fatherhood, rather than looking out for one’s own self-interest, others’ interests [should] take precedence in financial decision-making. With fatherhood, the economic game changes.

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