Wolfers on Reuters TV: From a Lost Decade to the Economics of Fatherhood

I’m a bit late in posting this, but thought it worth posting a recent interview which I did with the brilliant and engaging Chrystia Freeland:



The main point is one I’ve explored here before: the fact that we are halfway to a lost decade. We also explore our longer-run malaise, and my concerns that long-term unemployment may impair our economic recovery. Chrystia also draws me out on what I think policymakers should be doing.  My answer: More. A lot more. Monetary, fiscal, and labor policies all need to be directed at creating jobs.

Oh, and there’s more on economic imperialism, the political economy of macroeconomic policy at the zero lower bound, medians versus averages, and even why people persist in believing in the Easterlin Paradox, despite the data. The interview gets a bit more personal when she asks how I can square the data on kids and happiness, with my own decision to become a dad (a theme Betsey and I explored with Dubner, in the recent hour-long episode of Freakonomics Radio, “The Economist’s Guide to Parenting.” You can see the whole thing here.


Justin - Thanks for your candor. If only all economists were as direct as you in trying to hold our politicians accountable. . .


"Having a kid makes you less happy"

What evidence is there to back up the causality in this claim? Also, less happy relative to what? Parents are certainly less happy than single people or married couples without children in the same age bracket, but that doesn't necessarily mean that having children is irrational. Even though parents experience a decrease in happiness when they have kids, they might have experienced a greater decrease in happiness if they never had kids.

Empirically, comparing parents to single people would be misleading if there are heterogeneous preferences for kids. To really measure the effects of kids on happiness, you could instead compare the happiness of parents to couples in the same age group who can't have kids for medical reasons (although they would still have the possibility of adoption, so perhaps that's not the perfect reference group).