The Economist’s Guide to Parenting (Ep. 39)

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Our newest Freakonomics Radio podcast is called “The Economist’s Guide to Parenting.” This is the second of five hour-long podcasts we’ll be releasing over the coming weeks. Some of you may have heard them on public-radio stations around the country, but now all the hours are being fed into our podcast stream. (You can download/subscribe at iTunes, get the RSS feed, listen live via the media player above, or read the transcript here.)

I know what you’re thinking when you read the title of this podcast. You’re thinking what the **** — economists? What can economists possibly have to say about something as emotional, as nuanced, as humane, as parenting? Well, let me say this: because economists aren’t necessarily emotional (or, for that matter, all that nuanced or humane), maybe they’re exactly the people we need to sort this through. Maybe.

You may remember that we wrote a bit about parenting in Freakonomics; now we’ve put together an entire roundtable of economists to talk about a great many elements of child-rearing, with one essential question in mind: how much do parents really matter, and in what dimensions? So you’ll hear about parents’ effect on everything from education and culture cramming to smoking and drinking.

The economists include: our very own Steve Levitt; Betsey Stevenson and Justin Wolfers (both of whom show up on this blog regularly); Bruce Sacerdote; Joshua Gans (the author of Parentonomics: An Economist Dad Looks at Parenting; Melissa Kearney (whom you heard in our “No-Lose Lottery” podcasts); Valerie Ramey; and last but very, very much not least, Bryan Caplan (the blogger and author of Selfish Reasons to Have More Kids: Why Parenting is More Fun and Less Work Than You Think.

If you are like me, you will: learn a lot; gnash your teeth a lot; and laugh a lot.

Steve Levitt with his wife and four kids.

A few highlights:

LEVITT: So, I’m probably not a very good parent in the sense that I don’t obsess very much about my children’s success. I just kind of figure that everything’s going to turn out all right for them. And I probably wait far too long going down the path of things now turning out before we get involved. So, for instance, two of my kids were terrible readers for a long time. And they read fine now, but probably if I’d been paying more attention I would have been more troubled by it, I would have, you know, put them into tutoring programs and other things much more quickly.

Bruce Sacerdote and family

Bruce Sacerdote, whose research on adoption is featured prominently in the show, talks about some of the areas where nurture beats out nature:

SACERDOTE: You see that children are picking up their parents’ smoking and drinking habits with a very high degree of correlation, and it’s the same with the adoptees and the non-adoptees, they really pick up their parents’ habits, those type of habits explicitly. Another thing that’s undoubtedly contagious is that behavior of how you interact, how you treat other people, how you treat employees at a restaurant, or a retail store or something. I think those things are probably highly contagious as well.

Bryan Caplan with wife Corina, twins Aidan and Tristan, and baby Simon – named after the economist Julian Simon, who inspired his existence. (Courtesy Emily Korff of Veralana Photography)

And Bryan Caplan on the startlingly slim effect that parents seem to have on their children’s lifetime income:

CAPLAN: The Korean War orphans were adopted in the ‘50s and ‘60s at a time when it was much easier for low-income families to adopt. So, families were eligible as long as they were twenty-five percent above the poverty line, which would be quite unusual today. So, these kids were raised by a much broader range of the socio-economic spectrum than would happen to adoptees today. And yet, the finding of the study by Bruce Sacerdote was that the kids raised by the very poorest families grew up to have the same income as the kids raised by the very richest families. It’s striking that it’s the kind of thing that you would think of as being more about upbringing broadly defined than a lot of other traits. So it could be that it’s actual upbringing where your parents instill the value of a dollar and hard work in you. Or it could be something more like nepotism where because you get raised by the right kind of parents you get good connections, they actually make a phone call for you. And yet, actually the very best studies of the nature and nurture of income find that parents do have a moderate effect on your early income when you’re in your twenties, but basically zero for the rest of your life.

Justin Wolfers and Betsey Stevenson with the beguiling Matilda Sloan Wolfers (the only child to appear in our radio show) (Courtesy of Sarah Miller Photography)

You’ll probably hear more from Betsey Stevenson and Justin Wolfers in this hour than anyone else (as well as their beguiling 19-month-old daughter Matilda); they are very entertaining talkers when it comes to parenting. And candid too:

STEVENSON: I think that the hardest thing as a parent is to admit that you’re going to take risks with your child’s life, to actually admit out loud, I take risks with my child’s life. If you said that at a cocktail party, people would look at you like you were a monster. But of course we take risks with our lives everyday. I take Matilda out on to the sidewalk and we cross streets. Every time we cross a street we’re taking a risk. It’s not risk free to cross the street, or to ride the subway, or to go in the car. Almost everything we do has risks, and as economists I think Justin and I are really comfortable with thinking about risks and making decisions with them. And that means we have to face the really painful thing, which is we take risks with our child’s life.”

Melissa Kearney and offspring

And Melissa Kearney on how an economist mom talks to her kids:

KEARNEY: The way I explain things to my kids, I hear an economist talking to them. I mean, I explain everything to my kids in terms of opportunity cost. My daughter, when she was two in the grocery store, and I’m like, “Listen, you’re making choices and if you pick that you don’t get that.” Right, there’s a cost to your choices? And I’ll hear my son tell my daughter — they’re toddlers speaking — they’ll be like, “Look, you made a bad choice.”

Valerie Ramey with husband Gary, also an economist at UCSD; and their children Michelle and Sean.

Joshua Gans







Thanks to all the above economists and many others whose research we drew upon, and to everyone involved in producing the show. Additionally, here are a few of the research papers the show mentions or alludes to:

Product Recalls, Imperfect Information, and Spillover Effects: Lessons from the Consumer Response to the 2007 Toy Recalls.”

The Rug Rat Race.”

Bargaining in the Shadow of the Law: Divorce Laws and Family Distress.”

What Happens When We Randomly Assign Children to Families?”

The Paradox of Declining Female Happiness.”

Parental Education and Parental Time with Children

John Christie

What's missing in the section about happiness falling off for parents is a critical look at what happiness is being measured in the studies referenced. Generally, what's being measured is contentment. People who score high on the happiness scales do so because they're content, not because they find a particular joy in being alive every day. I think that's a perfectly good measure of happiness in a lot of ways. But it can drop for multiple reasons. For example, an increase in aspirations for the future, and desire to improve one's circumstances can also cause the happiness to fall. I'm not sure that's a bad thing. I'm also pretty sure that happens to parents. They become future oriented and aspirational in a lot of ways from wanting their kids to go to the best kindergarden to best college.


I love ALL Freakanomics shows. I wish I was an economist. This one confirmed my fears ... you can't buy happiness (or a place at a good school on a middle-class, nonlegacy wage).

My poor kid is dependent on my behaviour.

Oh well, just add another middle-aged alcoholic to the mxs. But ... she will have played varsity field hockey (possibly college); can play the piano, sax, and clarinet; has her girl -scout gold award; was a scholar athlete; and helped old ladies across the road.

Julien Couvreur

It's never too late and you can learn economics without "being an economist" (professionally). Start with "The armchair economist" (Landsburg), "Undercover economist" (Harford), "Freakonomics" (obviously), "Economics in One Lesson" (Hazlitt).


The problem i have with economists is they are seem so satisfied with themselves. Thinking you are so clever is a danger.  i realize they are using the best tools at their disposal at times but some of those tools seem really flawed.
One of the oldest stereotypes is the undeducated parents who push their kids relentlessly to finish school, yet we always look at uneducated parents to be the best indicator of their children's success. Then everyone seems to scratch their heads and then look at a completely different area. As a complete lay person, i wouldn't presume that the differences between uneducated adoptive parents and educated adoptive parents to be very great at all. Regardless of their education, parents who choose to adopt at all, let alone a foreign child of a different race, would tend to have a great deal in common. Being less traditional parents with a fairly open mind and the iniative to adopt from overseas would distinguish them despite ther lack of educational attainment though this isn't discussed. Why the surprise at the outcome?

It reminds me of when i worked as a librarian of the leading pay and human resource consultants. They had a formal evaluation tool to determine qualifications for leadership roles. Any statememt made by an applicant that began with "I was responsible, I did, I generated, I...blah blah" were counted as reliable statements and counted. Any "we" statements were dismissed.  While scanning articles, I came across a study that said women were way more likely to make "we" statements even when they were solely responsible and men were found to make make "I" statements even if the effort was a team project. This consultancy never factored how we use language into their calculation and yet at the same time could not answer why if women were performing as well or better than men in school and business this was not reflected in higher numbers of women directors. At the time, I thought - these people are so smart yet they can't see what's in front of them. Economists and business majors all glom together patting themselves on the back, always looking at the same data from the same angles.
Using education as the sole measure of whether parents will be useful to their children is so simplistic. My mother was uneducated (like many women of her generation) because her father didn't see it as necessary to educate girls in a family where resources were tight. So, those parents are going to make sure their children get to go to university.



Having two developmentally disabled children, parenting DOES matter. Getting early services is statistically shown to make a huge difference in the successful outcomes of these children - and it was hard, necessary work. Having 3 Individualized Education Plan meetings per year per kid, making arrangements for behavioral services outside of school, getting an aide so they can go to summer camp to be around typical kids - again hard, necessary work. If I and my husband did not do this work and fight to get services, no one else would.

My goals are modest: happy, healthy, and self sufficient kids if possible (which I would hope for any child), but with my children these programs I have arranged for are necessary for their survival as adults that most parents would take for granted that their child would be able to do - communication, crossing the street safely, self care, knowing how to tell time, how to take the bus, etc.


Pittsburgh Mom

I get very frustrated when I see stories on parenting advice from people who have just had their first kid. They discuss the risks you take with kids - crossing the street, taking the subway...ect. Really? How about when you're weighing the risks of a trip to the ER? Leaving them with a teenage sitter? Allowing them to play outside while you make dinner? I want to hear from families that have figured things out, not those who have yet to experience potty training!

Julien Couvreur

Why do you think those economists were only relying on their personal experience to weight risks? To the contrary, the point is that they study the evidence across many instances. For example, in his book, Caplan cites a number of twin studies which he bases his conclusions on.


This is a bait-and-switch story that takes its queue from commercial journalism. It promises to talk about one thing, but is actually talking about something else.

At first they make it sound like it's about nurture vs. nature. They claim at one point that who your parents are matters more than how they are when it comes to education achievement, etc, which they never properly define.

Their opening "bait," is nonsense - that we need people who are unemotional, non-nuanced and inhumane in their thinking (economists) to tell us about something organic, humane and emotional. WHY? I have no idea. And they never say.

Their "switch" in the middle of the story conflates "parental/social influence" with "obsessive parenting." Not the same things.

And their basic conclusion after a series of questionable if not bizarre claims is so inane, common sensical and mundane: "Don't hit your kids, smoke or drink because that will influence them badly...but don't do the other extreme of obsessive parenting and constantly shuttle them to tons of lessons and museums (culture cramming). Being kind to them is more effective." Um...DUH!



You have your kids watch TV instead of take them to sports? You're a bad parent. Your kids are going to be fat, uncoordinated dorks who get their butts kicked by the studs who steal all the attractive women.


Is there a way to get a list of the music used in this episode? Or in any episode, for that matter?


"Home is where, when you have to go there, they have to take you in." Robert Frost. Substitute the word parents for home, and you have the most important role of parents and family: unconditional love.

Julien Couvreur

Late comment here since this was re-broadcast.

Regarding the playground situation (leaving your kid behind to "teach her a lesson"): do you really think this is the way to teach as peaceful and civilized parents?

I have no doubt that your kid was subsequently afraid that you'd leave her behind and altered her behavior as a result. Similarly, I'm sure you can beat your wife not to interrupt your watching a game by beating her up.
The point is that the threat of harm is not an acceptable way to interact with adults and it is even less acceptable with children, as they are more vulnerable, dependent and trapped.
Threatening to leave her behind is a threat of grave harm for a little kid, and it would be especially distrubing coming from someone who says they love you and who are is supposed to protect you.

The observation in the podcast was spot on, this is a statist method. It is the initiation or threat of force to achieve what you want. All you have taught your kid, aside from being afraid of abandonment (great for self-esteem btw), is that this is an acceptable way to deal with interpersonal conflicts.

It is quite disturbing that you would be so smug to boast about this incident. It only shows your lack of principle and respect as a parent. Is that really the best you can do to resolve the situation? Is that how you deal with disagreements with adult friends?
How about you work on negotiating and agreeing to ground rules next time you go out? You can explain how her behavior makes it less enjoyable for you to go to the park together. I'm sure you can arrive at a deal, given that she'd want to go to the park but you expect a commitment to go home when time has come.

See Dayna Martin, Stefan Molyneux and others for tons of literature and material on peaceful parenting. Along the same lines, spanking is just not ok (I'm surprised this was not discussed in this episode since much data on this).