The Economics of Children

<>In April 1978 I presented this paper to the Extension Course of the Auckland Primary Principals Association. It was published in “Impact the Burden of Choice”, Volume 14 (pp.17-34). In 2014 the hard copy was converted into an electronic one. Optical Character Readers are not perfect, and Elizabeth Caffin kindly checked the preliminary text. In removing infelicities from the OCR she also corrected others in the original text. However the aim has been to maintain the style and content of the original publication. In some respects it is very 1970s but the analytical foundations remain relevant to this day.

            I say that this was work in progress. Other matters have distracted me since, yet for four decades the underlying themes have remained foundational in my social policy thinking – and my life.


Keywords: Social Policy;


The paper reports on some work in progress in areas related to economic and social development, and consequential policy. In particular, it describes an analytic procedure I have been evolving to investigate a number of issues in areas as diverse as long term economic strategy, superannuation, migration, the status of women, taxation and poverty. I have found that by treating children as a commodity produced by a child rearing industry, I could not only provide coherence to a number of such apparently diverse issues, but also that the drawing of the threads together offers a different perspective on the role and significance of children and parents in our society. It could be argued that such an approach is little more than treating our children like livestock, and that it will obscure the richness, and creativity of the human condition behind the poverty and sterility of money measures. May I say I acknowledge this point and readily accept that this economic treatment of children is limited. Surprisingly, however, this limited economics approach draws some very powerful conclusions, and we will find that the benevolence of the hard-headed economist need be no less than that of the soft-headed humanist. Indeed, in that the humanist is not able to answer those who insist in reducing all to money, one might argue that our economist’s approach is more beneficent.


Children as Investment


The economic analysis of children rests on the fundamental social fact that a society’s children are its next generation’s adults. Bill Sutch put it succinctly, “Our children, our future”. Without children a society has no future. Certainly adult migration is no alternative, for a mass transit camp such as European New Zealand in the mid-nineteenth century is not a community with the attributes we characterise as a society.


The economic consequence of this fundament social fact is that if society requires children for its future, it follows that the expenditure on children is an investment in its future. Just as a society invests in plant, machinery, and engineering works to pro­vide for its future physical capital stock, so it invests in children to provide for its future adults. If there are no children there are no future adults to work in the economy.


Economists measure the quality of investment by the amount of consumption that has to be foregone. That is our central idea of investment; saving now by foregoing consumption in order to produce an asset for the future. How big is this investment in our children?


We can identify three major categories of such investment; maintenance, provision of public services, and childcare.


By “maintenance” we mean the provision of food, clothing, housing, and recreation for the child. Maintenance costs can be substantial. A teenage girl may eat more than her father, her clothing will cost more. Total maintenance costs of our million-odd children come to about 12 percent of Gross National Products or GNP. GNP is the economists’ measure of the total output of the economy. Twelve percent of it is about the net output of the farming industry.


The main public services provided for child rearing are education and health, although services are also provided by such government departments as Justice, and Social Welfare. Moreover part of these public services are funded privately by parents through school and medical fees.


The largest part of the public service expenditure on children is in the education vote, and as a result we frequently fail to make the distinction between the institutional part of education, which takes place in schools, and the much wider range of experiences which collectively make up the child’s education.


Indeed in the first 15 years of life only a seventh of a child’s wak­ing time is spent in school, the remaining six sevenths is spent outside, over half of which is under the direct influence of parents. Thus parents are the major educational influence upon our children.


This conclusion is reinforced when we consider the first five years of development, when children have hardly any institutional education. (Only 1.5 per cent of the education budget is spent on pre-schooling). Yet there is considerable evidence to suggest that the first five years are the most important in a child’s life in terms of, for instance, the determinants of many of the child’s adult at­tributes.


Despite the importance of those first five years and the parents, we tend to think of educational institutions as bearing the main bur­den of childhood education, certainly in terms of the way we fund it. But we cannot expect our institutions to be properly effective unless that other six sevenths of the child’s life is also educationally rewarding.


Instead we are using the education system to provide ambulances at the bottom of the cliff to pick up the problems derived from the failures of the other six sevenths of the child’s life. The ambulances are expensive and ineffective, and the ambulance drivers, who thought they were recruited to teach, are understandably demoralized.


Together with the education expenditure on children publicly provided services for investment come to about 5 per cent of GNP, that is as much as the net output of the transport industry.


The third item of investment in children is the cost of childcare. For an economist this includes both the cost of childcare facil­ities such as creches, and the earnings which parents forgo when they stay at home to care for their children instead of going out to work.


Notice that an economist treats the purchase of childcare by a working mother and the foregone income of a non-working mother as much the same. As a result he does not get trapped in all sorts of fallacious arguments about one or two income families or sub­sidizing childcare — swamps where many soft-headed humanists have drowned. The issue will become clearer a little further on, but at this point it is sufficient to recognize that the problem is not the existence of two-income families or the costs of creches. The prob­lem is that children require care. This involves resources, and under present arrangements it is the parents who pay for the resources. We would make a lot more social progress in this dispu­tatious area if we were to recognize that some mothers may have good reasons for going out to work and others may not. Those who go out to work are entitled to adequate childcare facilities and the community has a responsibility to ensure this. But we should not force women to go out to work by only subsidizing childcare which is purchased and not childcare provided by the mother. Nor should we force women to go out to work against their better judgment, be­cause the family is too poor.


The sort of situation we have generated in New Zealand where a working mother with a young child gets a $4.50 week subsidy from social welfare if she uses an approved childcare facility plus a $3 a week tax reduction, nothing if she uses the father for childcare, and a $4 a week tax rebate if she doesn’t go out to work is too typical of the swamp that much of our social policy is in. It is not necessary to understand details of these various tax rebates and subsidies to appreciate the muddle caused by the threshing around of soft-headed humanists as our social policy sinks into the mire.


Incidentally fathers are the most important form of childcare for working mothers. In one survey they accounted for almost 30 per cent of the care provided, other relatives providing 20 per cent and neighbourhood friends a further 20 per cent (and the mother herself 15 per cent). We should be cautious in providing institutional structures which undermine such family arrangements and just as edu­cationalists need to be reminded of the importance of parents, those involved in childcare policy should not forget fathers. They remain the second most important person in most children’s lives.


The childcare swamp has also been enlarged by ignoring that care requirements vary with the age of the child. It is obvious that a recently born child requires almost constant attention from a full-time parent, but this requirement diminishes as the child grows up. Moreover the type of attention changes. Some of older children’s requirements may be of the nominal parental attention in standby for emergencies just like the fire brigade. It may be as disastrous not to have your firemen on standby prepared for a fire, as it would be to have a parent not around when his pregnant teenager reports she has been playing with fire.


Nonetheless it is idle to suppose, that a parent of a young teen­ager should spend the same time with the child as the parent of a preschooler. Consequently, we need to recognize that a women is able to re-enter the work force on a part-time basis after her children are established at school, and we need to ask what measures we should take to enable those who wish to work, to continue to re­main effective parents.


A very conservative estimate of the cost of the childcare pro­vided by parents in terms of foregone earnings comes to 8 per cent of GNP. That is about the same magnitude as the building and construction industry.


Moreover the figure represents about a third of the total female labour effort in the economy. That is a third of the socially productive effort of women goes into caring and rearing our children. There is no other industry which absorbs such a large proportion of any social group. As a consequence the status of women in our society is cruci­ally dependent upon the status we give to child bearing, caring and rearing. Not, of course, the status it appears to have from the social platitudes we throw carelessly around, but the status which arises from the way we treat it in practice. In my view this practical treat­ment is pretty cavalier, and the result is a downgrading of the status of women in our society.


Industry Size and Performance


If we add together the totals for each of the three components of investment in children, we get a total of 26 per cent of Gross National Product. There is no other industry anywhere near as large. The only comparable magnitude to our investment in children is in­vestment in physical assets such as plant, machinery and engineering works, which is also about 26 per cent of GNP. Thus of the total investment in New Zealand, half is investment in the single asset of our people, you might call it investment in human capital, and the remainder is in a variety of physical assets.


How successful is our child rearing industry? In answering such questions an economist compares ones industry’s performance with that of another, so at this point we are not considering whether the performance of childrearing is near optimum, just whether it is better or worse than other industries which may be also near or far from their optimum.


The natural way to consider the performance of an investment industry is to measure the return on the investment. This is by no means easy, particularly where human capital is involved. But such evidence we have suggests that investment in human capital is on average about five times as productive as investment in physical assets.


I hasten to add that the return we have been getting on our physical investment in recent years is so low that the conclusion is perhaps not as impressive as it might appear. Secondly the result is not the case for abandoning physical investment. It would be as foolish to do this as it would be to emphasize physical investment only and not bring up any children for the future.


Some people use export as a measure of an industry’s success. Quite frankly there is not much sense in looking at an industry’s export performance and ignoring its contribution to domestic production and import substitution. However, since there are those who insist on exports as the only valid measure performance, however silly such an approach may be, we might as well look at the child rearing industry’s export output. At least since its product is acceptable in many countries overseas this suggests some test of quality of the product.


We are also an importer of other countries’ child rearing output so we have to look at net exports. In recent times our net export of people have been running at a rate of 25,000 people a year. That is about half the total production of the childrearing industry, and suggests that it is comparable to our other big export industries.


The value of these net exports of people comes to about $2,500n which may be compared with $800m export revenue from meat. Thus the value of our net exports of live meat are currently three times the value of the dead meat.


Unfortunately we are not paid for our people exports. If we were, we would have a healthy surplus on the balance of payments not unlike an oil sheikdom. Instead we are frittering away the outstanding productivity of the childrearing industry by failing to provide a society attractive enough to retain our young adult New Zealanders.


Another interesting measure of our childrearing industries’ export performance is that we also export its social technology. British schooling has been markedly influenced by the New Zealand play centre movement. Throughout the world there are New Zealand pediatricians and educationalists holding senior positions as a result of skills acquired in New Zealand.


So whether you use a valid measure of the industry’s productivity or an invalid one of its export performance, the New Zealand childrearing industry is an outstanding performance.


Industry Size and Structure


The industry has about one million products, that is children various stages of production in about half a million factories – we call them families. So despite being our largest industry, childrearing is organized upon a cottage basis.


Thirty years ago there were about half million products in a fifth of a million factories. Thus the industry has shown considerable growth over the period, although a little below the national average.


This low growth performance, best measured by the net reproduction rate has been falling since Victorian times. Superimposed has been a cycle coinciding with the economic situation. During depressed times the birthrate is below trend, during prosperity it has been above.


However since 1961 there has been a dramatic fall in the re­production rate from two daughters per mother then to one daughter per mother today. That is we are very close to the situation where in the long run our stock of human capital will be constant (omitting technological change).


The reason for this falling fertility is probably changing per­sonal preferences for smaller families. Experts are sceptical as to whether we can ascribe much responsibility to improved contracep­tion. The evidence is that people are choosing smaller families, and contraceptive improvements are making this easier. We are less sure about the reasons for the preference: the economic climate, fear of nuclear devastation and ecodoom have all been suggested as possible explanations. My inclination is that it reflects women’s reassessment of their role in society, perhaps with couples seeing marriage more as a partnership than a procreation phenomenon.


The falling fertility has not been uniform by age. Birth rates have been falling for women over 20, most markedly for those over 30. On the whole they have been rising for teenagers, although re­cently available data suggest that since 1973 the birth rates for 15 to 19 year olds have begun to fall. Regrettably they continue to rise for under 15 year olds and if they are still mercifully low, they are 100 per cent for the pregnant girl.


That brings me to one of the most curious features of the child rearing industry. Most industries have some sort of entry restriction. It may be a minimum capital outlay, a licence, or training. How­ever, childbearing is highly unusual, in that barriers to entry are almost non-existent, or taking the expression literally, the barriers are self-imposed. We think about half the occasions of entry into the industry are – unplanned pregnancies through non­existent or failed contraception.


To deviate for a moment, you may think that the analysis suggests that failed contraception could be classified as an occupa­tional hazard in the child rearing industry, and hence an entitlement to compensation from the Accident Compensation Commission. I regret to report this argument has been tried, and the Commission turned it down.


It is not only ex-nuptial births that come into the accidental category, but unplanned pregnancies are common in de jure marriages. Incidentally some ex-nuptial births are planned. A couple in a perman­ent de facto relationship would nonetheless give rise to an ex-nuptial birth according to our recording conventions.


It seems to me that this accidental entrance to parenthood should be a matter of some social concern. Imagine if other occupa­tions were as dependent upon fortune for their recruitment. Actually there is a sense in which this is true for the farmer who inherits his farm from his father, and look what a mess farming is in as a result.


Of course accidental entry may not always be disastrous. For instance, it may be a question of timing, or a resolution of a couple’s conflict of a desire for children and the hard economic facts of the economics of children. You would be surprised at the number of unplanned pregnancies which occur within nine months either way of paying off the second mortgage.


Nonetheless one cannot help comparing the present situation with the traditional one where you didn’t have children unless she was married and you didn’t marry unless he was economically prosperous, and if an accidental pregnancy did occur, the child was reared in the grandparental home.


The point at issue is not the fact of biological parenthood, but the fact of social parenthood, and the lack of adequate prepara­tion for this. I want to spend some time on this issue, but before doing so it is necessary to look at our technologies of child rearing.


The Technology of Child Rearing


In New Zealand the basic technology of childrearing is parenting, and there are two general forms of parenting, namely one- and two-parent families.


At any point in time about 95 percent of children are in two parent families. However, despite its popularity I foresee growing problems, particularly because of the ill-defined role of the second parent, or father. We expect fathers to fertilize eggs and provide family financing. But is that all? After all a semen bank could be more efficient for fertilization, as any beef farmer will tell you, and taxation and social security more efficient at financing families, despite the Minister’s claim to the contrary.


This is not an idle issue, for unless there is more to second parenting that this fertilization and financing (semen and cents) role, then we are likely to shift to dominance of the single parenting technology, perhaps with the mother having a series of partners each of whom has little relationship with the children.


I believe there is an important role for a second parent; to provide support and relief for the first parent, to provide a diversity of experiences and alternative model for their children, and for the couple together to teach the children by example how to relate personally between equals.


However, it seems to me that our present social situation can be discouraging to two parenting. Of course there are fathers who choose to spend their leisure time away from their family. But alas too frequently the father spends little time with his family because of long working hours, or time spent travelling to work, in a second job, or building his own home. It is easy to deplore mothers who work. Might I suggest that a situation where fathers work long hours is equally reprehensible, but that properly the rebuke should go to a society which makes insufficient alternative provision for family financing, rather than to the hard working parent?


Indeed if we truly believe in two parenting, we should be considering how we can enable fathers to have some access to a child’s weekday life. I do not consider PTAs are an adequate substitute for a father visiting the school during working hours. I am uneasy at a society which considers children need 10 weeks of school “holidays” a year, but give the father only four weeks. And we need also to acknowledge the importance of babysitting facilities in parenting, to enable the couple to continue to grow together with shared adult experiences.


Having made a plea for a realistic approach to the promotion of two parenting, instead of pious platitudes, I do not want to appear to be condemnatory of single parenting. Indeed I acknow­ledge that a properly functioning single parent household may be much better for all concerned than a poorly functioning two parent household. If I am correct about there being advantages of two parenting, these advantages will not apply where there is continuing antagonism between the parents, or where one is unhappy or sup­pressed by the relationship.


Despite the hysteria created by self-appointed experts, and politicians, single parenting is not a new phenomenon. One of the first actions of the incoming Labour government in 1935 was to institute a social security benefit for deserted wives. During economic depressions, economic pressures tend to encourage family break­down. Nor is the interwar depression our earliest instance of solo-parenthood as a social issue. In 1862, a Canterbury magistrate, James Fitzgerald (later to become Provincial Superintendent), warned men deserting their wives for the Australian goldfield that the women could not be expected to be put on to the province’s equivalent of the Domestic Purposes Benefit.


Another common misapprehension is that the solo parenthood is always permanent. Frequently solo parenthood is a transition between different, or even the same, two parent families. Marriage remains a remarkably popular institution, even if it does not always appear in the official statistics. The common response after marriage failure is not to abandon marriage, but to look round for another partner.


I do not want to deny that solo parenthood has serious problems, and I am glad that the Social Development Council is currently preparing a report on them. But I suggest that we would have a better perspective on the issue if the self-appointed experts were less dependent upon their prejudices and more disciplined by the facts, and that if the facts were gathered less by casual observation and more by systematic research. I do not deny the sincerity of these so called experts, but remembering how the road of hell is paved, I have no doubt that the devil has them marked down for his Ministry of Works.


Other technologies used for childrearing include institutional care which, it is pleasing to report, is diminishing and a very small but possibly growing minority of parenting in communal and multi-adult families. Such alternative lifestyles are difficult social groups, but where the parents have the maturity and personality to benefit from them, I am sure the children will benefit also.


Based as childrearing is, on a cottage industry structure, with little capital and a lot of labour, it could be argued that there is a case for modernization of the industry. The argument would be for industrial concentration into a few factories, to be called orphanages or preschools or such, and the replacing of present labour intensive methods with capital intensive ones using computers, television and Skinner boxes.


Unfortunately the capital intensive methods are unable to trans­mit such fundamental virtues such as kindness, consideration, affec­tion and generosity; while these remain values to be promoted by our society we shall have to continue with labour intensive parent­ing techniques. And I say hurray!


But I suggest that if we are going to continue with parenting, we must pay more attention to the quality of the labour input, and consequently upon its training.


Labour Supply for Child Rearing


Earlier I drew attention to the accidental entrance of many into parenthood, but I emphasised the issue was not so much one of biological parenthood but of social parenthood.


It is sad that the biological issue has so severely limited our attempts to provide family life education. It would be crazy to prepare for parenthood without an understanding of the reproductive processes and their social consequences, but the situation where the debate centres on opposition to sex education is, if you will excuse my confused anatomical analogy, a case of the tail wagging the dog.


Not only has there been concentration on the wrong issue, but the self-appointed experts are frequently out of touch with reality. I am reminded of a group of prominent people in a Listener article, who were asked where they got their family life education from. A number mentioned growing up on the farm, and just learning from the animals. I leave it to your imagination as to what they learned from the cows about breast feeding, and I remind you that most of our children do not live on farms, and do not even get that opportunity.


The more sensitive mentioned they learned much from observing their parents, still probably the most important source for those who live in happy families. But do we condemn the rest of our children down to the cowsheds? And in any case, a couple of generations ago, families were larger and less isolated. A child would learn a lot from observing and participating in the care of his brothers, sisters, cousins, nephews and nieces. The same options do not exist today, and so traditional family life education is not available to today’s children.


Our schools have not filled the vacuum, and the sex education debate appears to have blocked serious family life education. I know that the marketing of our export produce is of considerable importance to the country and deserves many serious hours of schooling attention, but I wonder if we could between the discussion on the Honey Export Regulations Amendment No. 33 and the review of the documentary procedures for the export of livestock to Tangiers, or some such, squeeze in discussions on the role of affec­tion in human development, the objectives and effectiveness of differ­ent sorts of discipline and punishment, and the responsibilities and rewards of parenthood.


If this is considered a bit different could we not at least try to get some of the most elementary facts of the human life cycle across? Teachers tell me of their female school leavers who come back claiming “everyone in the class is married except me”. What a change to their attitudes, their social perspectives, and their resistance to pressure if they knew that in today’s New Zealand, the average age of marriage for a woman is 21.5 years and that perhaps 10 percent of women are choosing not to get married until after the age of 30. Would we not revolutionize attitudes to teenage pregnancy if it were widely known that the average age of first birth was 23 years and up to 20 percent of women are choosing not to have children?


Might I suggest that the self-appointed expert’s outcry against ex-nuptial births and teenage pregnancy is giving a spurious normalcy to such behaviour? Did you know that less than one birth in five is ex-nuptial, and if we exclude de facto marriages the figure is more like one in ten? Furthermore only one in fifteen births are with teenage mothers (and one in fifty with teenage fathers). I suggest that is not the picture that the pre-pregnant teenager gets from the media and that the distorted picture she does get may well influence her to make wrong decisions. Indeed much of that public hysteria has the same effect as booting the ball into your own goal!


Another aspect of that lifecycle that needs to be stressed is the occupational lifecycle, particularly of a woman. You will have all heard at your local prize-giving how the pupils may have to change their occupation two or three times in their life. Nobody notices that this is already true for my mother’s generation, who went to a job after leaving school, switched to the occupation of fulltime child­bearing, and then changed to another job when the children grew up. The problem for them was that the retraining (and re-entry) facilities were appalling. They still are. While I have illustrated the issue by women’s life-cycles, there is a similar one, but not as spec­tacular, for men. Certainly we should not fail to emphasize the role of fatherhood. If schools could get across this life-cycle and the responsibilities of parenthood, then they would have made a major contribution to family life education. Other contributions will be more of the ambulance variety, because on many other issues, students are not receptive to pedagogical instruction. This is under­standable because parenthood does not have much immediacy for them.


Accordingly we shall have to rely upon in-service training for parents, when they are very interested in the topic. Certainly we should not underestimate the willingness of parents to learn about parenthood. Alas in-service training facilities are fragmentary. There are a few voluntary agencies such as the Marriage Guidance Council, Play Centres and Parent Centres. The media must have some influence, although it has no systematic programmes despite equivalent ones for gardening, consumer affairs, sport, knitting and such like. Other agen­cies such as preschools and schools provide a little training for par­ents, almost by accident. But the overall affect is pathetic. Quite frankly some schools would be more effective if they tried teaching the parents rather than the children. After all it is parents who are controlling the top of the cliff, or not, as the case may be?


Absurd though it may sound today, in a decade we may be using the schooling system for in-service training of parents. This can be done overtly in terms of formal courses or covertly as parents are involved in teaching activities. There is no hurry for such a proposal. After all ten years means that only another half million parents will miss out on adequate in-service parent training, and half a million children.


Parenthood training is another example of the investment nature of the child rearing industry the effort of improving parents now, results in better adults in the future.


Financing Child Rearing


If childrearing is an investment industry for our future, the financing of the industry is essentially savings. Who supplies these savings, amounting to about one quarter of GNP?


Some 60 percent of the savings invested in our children are provided directly by the parents. The remainder is provided by tax­payers, by the state. This 60 percent, or 16 percent of GNP, is the largest single source of savings in the economy. If you note that parents will also be saving to pay off the house mortgage, contributing to their occupational pension, and as taxpayers providing govern­ment savings, parents are the country’s largest and most important savers.

This financial provision for our largest and most important industry is a curious one. Imagine if we said to house builders that in future the financing of housing would be provided by them in that they would work for free and provide all the house materials out of their own pocket. When the houses were built they would be given free to the state. In return, and to show how important housing was to our society, the state would generously provide them with a builder’s benefit of $3 a week.


Understandably the builders would take a dim view of this proposal, and would argue that it was most unfair that they should have to provide most of the savings for the industry that they work in. Yet that is exactly what we do to parents.


It is not sufficient to justify the present situation by arguing that people are parents by choice. First of all up to half of them are not. Secondly if the argument were valid we could equally justify that house-builders and economists were there by choice and con­sequently they should not be paid either. If a workman is worthy of his hire, then so is the mother.


It is not at all surprising that if parents should be compulsorily required to make a large contribution to the savings of the economy, they will have little income left over compared to the childless. We can see very clearly from this that family poverty occurs in New Zealand not because there are one and two income families, but because families have children and they are expected to provide for the children out of the same income as the childless.


As a result many families are in poverty. Using 1973-74 house­hold expenditure data, I found that about a quarter of our children and a fifth of parents are in families whose incomes were less than the equivalent of the social security benefit for a married couple. That is beneficiaries on the minimum benefit were better off than half a million New Zealanders in the childrearing industry. In the last four years the numbers of the poor has probably risen.


There will be some who will say that this poverty does not matter, because it is only relative poverty and the New Zealand poor are better off than the average Indian peasant. Passing by the thought that advocates of this view are invariably much better off than the Indian peasant, we should note that over the last few years there has been a steady and growing stream of evidence showing that poor family incomes are associated with inadequate access to health services, higher accident rates, limited educational opportunity, and an inferior environment for the children. That is, poverty is causing social problems, and the only surprising thing about this conclusion is the ostrich-like refusal of many to observe the obvious.


Perhaps even more worrying than these problems is the impact of the poverty on family life. We mentioned earlier that during a depression men are likely to desert their families. What happens is the man becomes demoralised by being unable to provide adequately for his family and in some cases physical desertion follows. In other cases it is a spiritual desertion of family responsibilities as occurred through alcoholism to the father in Ian Cross’s God Boy. Undoubtedly this demoralization is occurring again today, and the complement of it is the mother’s demoralization because she cannot make the family income meet family needs. Of course if we did not have such a materialistic culture, and we thought that the human element in childrearing was important even from fathers, such demoralization would not be so important. But materialism is important, as it is bound to be in a society in which some are poor and others are rich and conspicuously consume their wealth.


There is one parenthood area where society has made some provision for poverty, although in the usual bumbling way its solution raises as many problems again. Child-rearing establishments being operated under the single parent method of production are entitled to the Domestic Purposes Benefit which provides an income for a solo parent with one child well above the equivalent income of many families dependent upon parental earnings. There are many problems associated with the DPB, most of the politicians making but the most ludicrous is the unfairness which arises between those eligible for a DPB and those not.


It is absurd that we place intact New Zealand families under severe financial pressures, and when they break up we put them on to a better financial footing. If you said to a builder that if you build with concrete you must finance the housing yourself, but if you build with bricks you will be entitled to a Building Purposes Benefit, you can be sure that the builders will switch to using bricks, even if they have no straw. Is that not what we are doing with our families?


Let me make it clear that I am not accusing Bumbledom of deliberately splitting up families. Bumbledom hardly does anything deliberately. Instead it wanders round in a pious alcoholic haze of political rhetoric and antiquated images of a non-existent past. That its policies encourage families to split up is an accident. Accidental or not, that is their effect.


I might add that sometimes the policies are not without their amusing side. For instance there is the story, which ought to be true, of a Hamilton couple who split up. He disappeared down to Twizel while she went on to a DPB. When they reunited six months later, they had saved enough between them to put a deposit on their own home.


You may get cross that such people work the system for their own benefit. But I suggest that there are more grounds to be angry at the system which encourages this sort of malpractice, because it is the only way which some families can establish themselves with a decent home on a reasonable standard of living. And we shall continue to have these anomalies and injustices, while we insist that the majority of parents provide the funds for the investment in our children. Moreover these anomalies and injustices may be minor compared to the consequence of family poverty upon our children in terms of their happiness and success in growing up to adulthood. Which leads me to the last way to assess an industry—in terms of its quality.


The Quality of Child Rearing


It would be invidious to attempt to assess here either the quality of our childrearing activity or of the adult end products. Instead I want to suggest some ways in which we can improve that quality in terms of seven areas: access, health, training, housing, time, funding and organisation.


I would not support the use of direct legislative means to control entrance to parenthood. Nonetheless we can do much to ensure that those who enter parenthood will do so at a more appropriate time. Firstly we must ensure the understanding and availability of effective contraception, including abortion as a con­traceptive back-up where appropriate. 1 was shocked to notice recently that the only contraception mentioned by the ex-Medical Director of Plunket in his widely read Mother and Child was the rhythm method which is between 8 and 40 percent efficient, or 60 to 92 percent inefficient.


But we also need to take the social pressures off adults to have their children too early or when they don’t want them. We need a change of attitude which emphasizes the responsibilities of parent­hood, and that it is normal and sensible to have your children in your mid-twenties. We need to ensure that our young women have satisfying jobs, so that they do not turn to motherhood as an escape from dreary, meaningless work.


We need to improve the health of our children. Let me give you three examples of our present failures. Dennis Bonham, Senior Professor of Obstetrics and Gynaecology, remarks: “That if the services now available in the better areas were universal there would be a marked reduction in the national perinatal mortality, with a consequent saving of some 300 babies per annum.” Secondly a Department of Health study in the Wellington area showed that those children that were at highest health risk had least access to health services. And thirdly, and almost unbelievably, 36 percent of the New Zealand population does not have fluoridated water supplies, despite the known effectiveness of fluoridation in promoting dental health.


A few years ago New Zealanders were proud of the health of their children. Since then we have relied on social myth, and the alternative research depicts a very different story. Today a fifteen year-old New Zealander is just as tall as his British counterpart, although we once prided ourselves on the superiority of the health of our children in contrast to the British. Our fifteen year olds remain heavier than the British, which is not cheerful news either, since fat is a major factor in future coronary disease.


And that focuses on the health in children issue. We cannot skimp on preventative medicine for our children. The inevitable outcome is more expensive and less effective medicine in adulthood.


I have already drawn attention to the lack of training for parent­hood. Let me readily acknowledge that on such matters you can take a horse to the water but you cannot make it drink. But pro­moted properly our parental horses would be only too willing to drink from a trough of education which would improve their child-rearing.


We argued that there are two points when parent education can be effective; in the school and at the in-service level. The aims at school were discussed earlier: a measure of their effectiveness would be when members of the first fifteen can hold and play with a baby without any degree of embarrassment. In order to get the material for practice we may have to associate community creches and kinder­gartens with our secondary schools, and there is no reason why we should not integrate the institutions so that the schoolchildren provide some of the labour and learn about child-rearing at the same time. May I emphasize the importance of including boys in any parent education program.


The inservice training of parents needs to take place around the existing institutions such as parents’ centres, kindergartens, play centres and schools. To be effective we are going to have to recognize that if parents are broke they can’t afford the costs of the courses, if they are busy or overworked they can’t afford the time, and if they have children they need babysitters which they will not be able to afford because they are broke. Again I emphasize the importance of parent education for fathers.


Finally with regard to parent education I draw your attention to an excellent report prepared by the Social Development Council on this topic.


Housing is a large topic, particularly if we extend it to cover the neighbourhood environment. To put it briefly we have been carelessly dumping our families into minimum housing with few social amenities. Fifty years ago we put our lunatic asylums on the edges of the town, where we could forget about them. Today we put our housing for children on the edges of towns with as much thought for our children’s needs. Twenty-five years ago we knew that the Lower Hutt suburb of Naenae represented a major failure as a social experiment. Undeterred, we have repeated the experiment again and again. It will only surprise those who believe Bumbledom can learn, when this year or next there will be published a report on the new West Auckland suburb of Massey which will demonstrate that the errors of the last twenty-five years have been repeated.


I shall also have to deal briefly with “time”, that is the time parents have for themselves to function as a couple and with their children. I have already drawn attention to the shortage of time most parents experience as they attempt to increase a meagre income by extra work, or struggle with an inadequate budget which often involves time-consuming activities like trudging around supermarkets searching for best buys, or washing by hand after the ancient washing machine has broken down, resulting in travel­ling time a long to work  from a cheap house in the suburbs.


There is the positive side to families which have this time. The beneficial influence of a mother who has time with her children to talk to them is well known. In recent years a similar effect has been found with fathers—that is, children benefit academically and emotionally if their father spends time with them. This research result has taken longer to identify simply because so few fathers have this time, and it has taken enormous expensive samples to establish the result.


Parental time is therefore critical, not only when the child is home but also as the child moves out into the wider world. It is good that preschools encourage the mother to attend with her child so that she knows what is going on there, and so the separation of parent is smooth, and not as it can so easily be, a traumatic disaster. It is a pity that more fathers do not have the same opportunity. Could not parents be more involved in school life also? I’d like to see parents having more time to be able to watch with their children their television and other recreational and cultural activities. It is vital that a child can share its experiences with its parents. Could we coin the phrase “the family that plays together stays together”? And more parent involvement might lead to improve­ment in present leisure facilities for children; like removing the junk that TV serves up between 4 and 6 o’clock.


It’s important the parents have time to waste—which they can use to teach children to carry out household tasks. If you are short of time, it’s quicker to do it yourself, and your children will never have the privilege of assisting in the family housework.


I have already argued the desperate need to improve family finances. Whether this is done by giving all parents a DPB or by a system of tax credits I leave the politicians to decide. Just providing they cough up the cash.


There will be some who will claim that the country cannot afford to get our families out of poverty, or ask why they should pay taxes to provide for other people’s children.


To the first question we note that there is no problem finding subsidies for all sorts of strange and peculiar industries. It is just when you get around to asking for support for New Zealand’s most important industry that the cash appears to dry up. We can find half a billion dollars a year to provide for the social conse­quences of alcohol abuse. But if you ask for $10 million to double our effort on preschool education we are told we are in a period of financial stringency.


To those who question paying taxes to support other people’s children may I ask who supports them when they are unemployed, sick, or retired. It is those other people’s children, of course. The Welfare State is based upon the principle of supporting those in need, and when the support is investment in our future we are twice blessed.


Or not—if we do not provide the support. Some young thugs beating up an old woman encapsulates the failure to invest in children. A decade earlier that elderly woman’s generation failed to provide sufficiently for child rearing, the children’s development was stunted, and they have grown up to be economically under productive and social nuisances. It is said that the sins of one generation are passed on to the next, and yet on to the third generation. When the sin is one of omission of support for child rearing, the third generation is liable to return it to the first in the form of violence.


I may say that this economic and social interdependence of the generations attracted me to the notion of children as investment. My advice to those who wish to ignore it and object to supporting other people’s children is to stop fussing about violence, return your National Superannuation, and lay off the liquor.


I have three suggestions for promoting the organization of the child rearing industry. Firstly it needs a Parents Union to act like any other trade union, such as the Medical Association, to promote the interests of its members.


Have you ever noticed how, on Budget night, the media collects opinions from the Chamber of Commerce, the FOL, the farmers, and one pressure group after another? But not a word from parents, although there have been important changes in the funding of childrearing in the last two budgets. If you don’t have a union secretary, nobody cares about you.


Secondly, we might straighten up a few politicians if we gave children the vote, perhaps only at half an adult vote per child with the entitlement being exercised by the parents. The result would be a little less piety towards childbearing and a little more action.


Thirdly, I suggest we need a Society for the Preservation of Conservative Standards, in opposition to the present motley bunch of societies for the Promotion of Reactionary Standards. Too much of the running today is by advocates of the application of standards of behaviour which did not exist in the past to situations which do not exist in the present. What we need is a more sympathetic approach to people trying to conserve traditional values, as they see them, in a society which is vastly different from that where those values were first evolved. One of the first objectives of such a new organization must be a systematic description of what is happening in family life, rather than relying on the cavalier manipulation of some dubious statistics in order to justify prejudice.


As you know, economics is a value free discipline so that economists regularly can give their judgments to the media entirely free from any personal bias or political commitment. I realise I may have failed in this paper to attain these standards of value freedom set by my eminent colleagues in the economic profession. If my personal biases have intruded a little, this is only because I have been unable to attain the usual levels of dispassion when discussing the subject.


For these are matters which 1 do care about, as a New Zealander who returned from overseas because of my commitment to this country, and who is raising children here.


But whatever one’s value judgments there is a strong economic truth in the analysis that if children are investment for our future, to under-invest now is to undermine our future. Today we see the consequences of that under-investment in the past, and the economic situation is such that it would be easy to continue to under-invest. To do so would be to cumulate major social problems among our people and economic problems amongst the labour force in the 1980s and 1990s. And as today’s children are tomorrow’s parents, we will be undermining the next generation of children.


But it is not simply a matter of spending more on conventional education, any more than we can solve our health problems by spend­ing more on hospitals or ambulances. We need to improve the quality of the six-sevenths of a child’s life while he is out of school, and in particular in the five years before he gets there. This is not to say that our schools have no role but to suggest that they have to modify this and to support the family, rather than just be left picking up the mess resulting from unsupported families.


Earlier I expressed the reservations as to the economist’s approach to childrearing as an industry. I hope I have shown you that providing we remember the humanity, and the humour, of the situation, an economist can draw some important conclusions. Perhaps the irony is that if we were to treat our children as sheep and cows in the way that the economic analysis assumes, then we would be better to treat them and their parents as we do in New Zealand today where they are classified as free human beings.


If the economics suggests that childrearing is our most important industry, then common sense suggests that improving it is our most urgent task.

Note: The economics underlying this analysis is elaborated in B. H. Easton, ‘Population and the Economy’, in “The New Zealand Population”, edited by James O’Neill and Warwick Neville.