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


Also late comment since the rebroadcast...

Despite all of the talk about relying on data and reason, I was unimpressed about how much of this episode was essentially anecdotal. Particularly about music lessons. (Disclaimer: I am the spouse of a piano teacher)

The question was raised about the worst investment and the person responded "Music lessons." It was clear that his answer was only his best guess and he supported it through the anecdotal evidence of his father... and his own experience. In so many conversations my wife and I have with others, very often adults bemoan the fact that there parents let them quit piano.

Additionally it seems that the only result being judged was if people loved music more or less. There is plenty of research that shows benefits beyond that, particularly in math and science development.

I guess self-professed lazy parents just don't want to deal with any hassle whatsoever.



While it may be that parents don't have much effect, how about high school's effect? In 1980's, Garfield high school, made famous by the movie "Stand and Deliver", went from gang infested 18th percentile to college bound 75th percentile in 4 years. There's a very interesting book by Henry Gradillas, Garfield high principal at the time, called "Standing and Delivering" that describe the circumstances of its meteoric rise.

The parents of those students come from poor backgrounds. But having gone through Garfield high school, and many going to college, did the kids turn out well? I assume they did, but hard scientific evidence is needed to address the question: does good high school and high school success lead to better outcome in life, even if they come from poor home background?

SL & SD, this sounds like an interesting project for a talented freakonomics researcher to explore (employing lots of free labor from graduate students, of course!). How about study on current status of students who graduated from 5 year before Gradillas, during, and to 10 years after his departure? We know the school stats of how it went from bad to good to bad, but life stats of the graduates during his tenure are sorely missing.



I loved the episode. Regarding the proposition "having kids makes you less happy" I don't doubt that the numbers are what you say they are. What I do doubt is that you are measuring something interesting.

I'm pretty sure that in another freakonomics podcast I heard about how people were terrible judges of what mechanism would be most likely to influence their behavior (texas? water conservation?) with the upshot being people had no idea what would really affect them. The researcher in that study "advanced the ball" not by asking people "what would influence you" and then using that data -- they advanced the ball by objectively measuring what worked.

The point I'm making is I'm guessing all the "parents are less happy" are based on self reporting answers to the vague question "how happy are you on a scale of 1-10" or some such. Any measure that is based on self reporting deserves a lot of scrutiny and suspicion.

What also comes to mind are studies about lasting happiness and success being based on working hard towards goals that feel meaningful.

I'm not saying that the self reporters are definitely wrong. I'm saying I don't trust them to give useful answers.

About the only interesting part of the "having children makes you less happy" result it that it may stimulate more meaningful investigation.



Love your podcasts...
Must agree that signing the kids up for various activities will in no way make for a "better" kid, however my wife has a more practical, if not statistical theory. The point is to keep them occupied; you present them with various activities, sports, music, art, and hope something will keep their attention. If they have no interests and hobbies when they become teenagers with too much free time, my wife believes there is a greater chance of them winding up hanging out at the mall, falling in with the “wrong crowd” etc.
Certainly not a 100% theory, but anecdotally I can see her point.
“Idle hands do the devil's work.”


Great rebroadcast!

You stated that studies show a small influence of parenting on attending college. This was based on studies of children in adopted families vs. biological families and their corresponding rates of college attendance vs. their parents.

Has anyone studied the correlation of adopted children vs. their biological parents with respect to attending college? If this is high, then that would bolster the claim. If not, then that might suggest other factors are coming into play.

Thanks much!


I was interested to hear that Justin (who is Australian) and Betsy calculated the cost of marriage as $20,000 per year.
I was wondering if this is true just in the USA, or also in Australia, where I am from.

Also, how is this figure calculated?

... Curious!!


Awesome Podcast.

But, I do find a flaw in the korean adoption statistics, where they compared korean adopted kids' income versus the biological kids' income.

Did they factor in the discrepancy between average asian american income versus white caucasion? It's very obvious that whites have higher income than asians, or immigrants in general.


"It’s very obvious that whites have higher income than asians" I love how you say something is "very obvious" and then immediately follow that with an empirically untrue statement.


With regards to leaving your child at the park to 'raise the price' or cost of her refusing to come. There IS another way. You can make it more worthwhile to leave by offering candy to leave, and/or TV when they get home. There are other ways of creating consequences for the child without them learning to fear they will be abandoned when they are difficult. Not good for girls to feel this as it can be manipulated to keep her in her place as a grown up.


Fantastic podcast! However, I am not sure that the data is complete for the conclusion though.

The data suggests that adopted kids, presumably from low-income parents, end up similarly regardless of the kind of parents who adopt them. Thus, nurture does not matter. The conclusion is valid for those kids in the sample space.

However, I do not see data that kids from affluent families end up similarly regardless of the type of parenting .. i.e. higher IQ kids (presumed in the podcast) will end up similarly regardless of nurture. Higher potential kids will intuitively benefit a lot more when there are many more opportunities in the environment. (E.g. USA vs Africa,India etc.). Hence, shouldn't parents take active nurturing decisions around finding the best environment? Hence, nurture should matter?


I am writing this post in the hope that if anybody returns to this podcast page having listened to the re-broadcast, they will disregard what they learnt in the podcasts.

I am researching in child psychology, and I will tell you with utmost confidence that the role that parents play in bringing up children has been seriously misunderstood in this podcast.

Psychologists acknowledge the definite underlying 'nature' in everybody; constructs like temperament and IQ have strong genetic determination. However, the environment is key. The way a child learns to interact socially and emotionally in their early years is the most predictive of their life course.

I tried an elective course in micro-economics with a spare unit while studying Psychology, and was surprised at the similarities of the disciplines - finding ways to measure and explain relationships using empirical evidence. However I did not try for a second to apply my psychology research methods to economical questions.

The economists should stick to their own turf - this information given to the public is extremely misinformed, disrespectful to the progress psychology has made, potentially damaging to parents and children, and in my opinion, unethical.



That's true. You cannot control everything in your children.