Having caught your eye, I direct you to an article in the April 9, 2015 edition of the Grey Lady. It discusses attempts by various countries to boost domestic birthrates. The same issue had been considered earlier by Noah Smith. There are two questions lurking here. First, what is the optimal population size for a country? If the goal was to shrink the population then a declining birth rate is not a bad thing. Suppose the goal is keep the population fixed, because, say of pension obligations. Then, one wants a replacement birth rate of roughly 2 per couple.
If the birth rate is below the target, what should one do? Interestingly, I cannot recall anyone I have asked or read who does not turn to Government interventions of various kinds. Noah Smith, for example, only discusses Government interventions before concluding one should imitate the French. If the birth rate is below what is optimal for society, why doesn’t the market take care of it? Do we have a missing market? Is this a public goods problem? (If so, then, Mankiw who is often castigated for being a selfish beast, is, in this case, an unstinting provider of public goods, see here.)
Analogies are sometimes helpful (if biology is the study of bios, life; geology is the study of geos, earth, what does that make analogy?). Farmers plant crops and after a period, the fruits of their labor are harvested and sent to market. The Farmer must anticipate what will be demanded in the future to decide what to plant now. What if she plants turnips when what is desired are parsnips? This problem is solved with a futures market for parsnips (or turnips or pork etc). Why not a futures market for babies? Those who want warm bodies in the future to support them in their dotage pay for babies now. Swiftian, I know, but interesting to consider. Once one thinks about how to implement the idea, difficulties emerge. One might, for example, be concerned with moral hazard on the part of parents. However, these same difficulties are present even with various Government subsidies.
The Leisure of the Theory Class 
14 comments
April 9, 2015 at 9:04 am
Anonymous
Or just open the door for immigration.
Surely that’s much easier than trying to increase the birthrate, albeit not always politically feasible.
April 13, 2015 at 3:11 pm
rvohra
If we were we one big country, the problem would still be present, unless we can rely on aliens from beyond the stars!
April 10, 2015 at 1:13 pm
diomavro
I don’t think futures markets is possible because there is too much heterogeneity. If you are choosing a baby you want it to have good genes. The only way I can see this working is once cloning gets started so that the product is homogenous, but that would kind of throw away some of the robustness we have to diseases.
April 13, 2015 at 3:07 pm
rvohra
Dear diomavro
but what about pools of babies?
April 20, 2015 at 7:11 pm
diomavro
What about pools of babies? How would that work?
April 27, 2015 at 7:17 am
rvohra
Dear diomavro
Parents would agree to pool the future incomes of their children and share a portion of it when in their dotage. You will immediately some challenges. How to schedule and sequence payments, parents will have an incentive to shirk on investing in their children etc. In short, all the problems associated with a pension plan!
April 10, 2015 at 5:28 pm
Effective Differentials
I was thinking about similar issues a while ago – I think what you need are equity investments in people. That should correctly align incentives between parents and children. (They could also prove a good way of providing price-mechanism-based-information about different human capital investments.)
https://effectivereaction.wordpress.com/2015/03/09/human-capital-contracts/
April 13, 2015 at 3:06 pm
rvohra
Dear Elective Differentials
Thank you for the link. Yes, pledging a share of future output has some attractive features (I believe that David Bowie did this once, see http://en.wikipedia.org/wiki/Celebrity_bond).
But, there is the pesky moral hazard problem which in the standard model of the lender funding a manager is resolved via debt rather than equity.
In the context of parent reproduction decisions, it would be the parent pledging a share of the future output of the child, which raises a thorny conflict of interest.
April 11, 2015 at 5:50 am
Mike Huben
A clever idea, except that people are not commodities, with incentives to minimize production costs to maximize profits. Do we really want to replicate the puppy mill for humans? Granted there are already “quiverfull” fundamentalist religious groups that would leap at this opportunity for subsidy, but the result is perhaps not as productive a set of offspring.
April 13, 2015 at 2:57 pm
rvohra
Dear Mike
The phrase: `commodities, with incentives to minimize…’ Threw me. We choose our fiends and companions by comparing and contrasting their various attributes in the same way as we choose between cars and homes. We may not choose our relatives, we do choose the frequency and depth of our interactions with them. In some cases, if they are particularly odious, we cut off ties altogether. I would have thought what distinguishes humans (and other living things) from commodities is precisely because they respond to incentives.
Finally, was not clear if you were arguing against subsidies for reproduction on the grounds that they would be `captured’ by certain religious groups (e.g. Israel). This would be an argument against certain kinds of subsidies not the principle of subsidies itself.
April 11, 2015 at 7:19 pm
Free Marketer
One solution is to get rid of the social programs for the elderly and have laws that would make it the children’s job to pay for their old parents. This would provide incentive for people to have babies.
April 12, 2015 at 6:09 pm
Anonymous
But think of the screening distortion!
April 13, 2015 at 2:45 pm
rvohra
Dear Free Marketer
Writing the laws would be the challenge. How should the share of a child’s output that goes to parent scale with parental investment? Would a parent who has abused a child be entitled to share of child’s future output? When parents divorce, how would the child’s future output be shared?
Even if the laws were in place, a natural response to putting all one’s eggs in one basket and watching it carefully, would be to diversify. One could imagine parents pooling the future output of their offspring. This of course, increases the temptation for a parent to skimp on investing in their child. Notice, we are starting to get closer to a pension system!
April 19, 2015 at 9:55 am
Steve Finnell
THE QUESTION OF INFANT BAPTISM BY STEVE FINNELL
Does infant baptism find support in the Scriptures? No, baptizing babies is a man-made doctrine.
Mark 16:16 He who has believed and and been baptized shall be saved; but he who has disbelieved shall be condemned.
Belief precedes baptism in water. Infants cannot believe nor can they disbelieve. Baptism is for those who have already believed.
John 6:24 ‘Therefore I said to you that you will die in your sins; for unless you believe that I am He, you will die in your sins.”
Jesus said unless you believe you will die in your sins. Infants cannot believe. Will they die in their sins? Of course not, babies are not guilty of any sins. In any event, water baptism does not wash away sins of non-believers. If it did, why did Jesus not instruct us to baptized believers and non-believers alike? THERE IS NOT ONE CASE IN SCRIPTURE, WERE A NON-BELIEVER WAS IMMERSED IN WATER.
Matthew 28:18-20 And Jesus came up and spoke to them, saying, “All authority has been given to Me in heaven and on earth. 19 Go therefore and make disciples of all the nations, baptizing them in the name of the Father and the Son and the Holy Spirit, 20 teaching them to observe all that I commanded you;…..
How would it be possible to teach infants all that Jesus commanded?
Acts 2:22-41………41 So then, those who received his word were baptized….
On the Day of Pentecost the apostle Peter preached Jesus. The three thousand repented and were baptized in water. They were not baptized before they received the word of Peter. Infants cannot believe nor do they have anything of which to repent. There is no Biblical doctrine that teaches that adults or infants should be baptized before they believe.
Faith (John 3:16) precedes water baptism. Babies have no faith.
Repentance (Acts 2:38) precede water baptism. Infant have not sinned; therefore, they do not need to repent. Babies cannot turn from sin and turn toward God. They are not sinners.
Confession (Acts 8:35-37) precedes water baptism.
INFANTS ARE NOT GUILTY OF SIN
James 1:14-15 But each one is tempted when he is carried way and enticed by his own lust. 15 Then when lust has conceived, it gives birth to sin; and when sin is accomplished, it brings forth death.
Do infants lust for fornication, are they thieves, do they get drunk, do they lie, are they swindlers? Babies are not guilty of sin.
Ezekiel 18:20 The person who sins will die. The son will not bear the punishment of the father’s iniquity, nor will the father bear the punishment for the son’s iniquity; the righteousness of the righteous will be upon himself, and the wickedness of the wicked will be upon himself.
Infants are not guilty of their fathers sins nor are they guilty of the, first man, Adam’s sin.
Cain was not guilty of Adam’s sin; he was guilty of his own sin because he murdered his brother Abel.(Genesis 4:1-8)
All men die physically because Adam sinned. Men die spiritually because of the unforgiven sins they, themselves, commit.
INFANT BAPTISM?
Infants are not candidates for baptism because they are not guilty of sin.(Ezekiel 18:20)
Infants cannot be baptized because they are not capable of believing the gospel.(Mark 16:16, John 3:16)
Infants are not subjects for baptism because they cannot confess Jesus Christ. (Romans 10:9-10, Acts 8:35-37)
Infants are not candidates for baptism because they cannot repent nor do they have anything of which to repent. (Luke 24:47, Acts 2:38, Acts 3:19)
INFANT BAPTISM IS THE PRODUCT OF MAN-MADE CREED BOOKS.
Posted by Steve Finnell at 2:41 AM No comments:
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