The New York Times
By: Nancy Folbre
January 18, 2010
Nancy Folbre is an economics professor at the University of Massachusetts, Amherst.
Most families with kids prioritize spending on them. The public sector doesn't. In fact, it's pretty hard to figure out exactly what the government spends on children compared to what it spends on other age groups, like the elderly.
It's even harder to figure out why we spend the way we do.
A new fact sheet detailing public expenditures on children in the United States has just been added to a growing inventory of Brookings Institution and Urban Institute reports on this topic.
Two salient patterns emerge. First, public spending on children amounts to about 2.2 percent of the gross domestic product. By comparison, we spend about 5.3 percent of G.D.P. on the elderly.
Second, public spending per child goes up after children reach age 6, despite considerable research showing that younger children enjoy especially significant benefits from early-childhood education.
Largely as a result of differences in public subsidies, full-time, year-round child care for young children costs more than public university tuition in 44 states.
Evidence also suggests that young children are particularly vulnerable to the effects of poverty. Yet 19 percent of children in the United States lived in poverty in 2009.
Parents continue to bear most of the costs of rearing the next generation, while the elderly reap significant benefits -- whether they have helped raise children or not. Children grow up to become working-age adults paying the taxes that help finance Social Security and Medicare.
Of course, working-age adults hope to grow old and take advantage of those benefits as well. But the ratio of the taxes we pay to the benefits we receive over the life cycle depends in part on the relative size of different age groups, as well as the evolution of public policies and the rate of economic growth.
Comparisons of spending on different age cohorts sometimes elicit concerns about "intergenerational warfare." But ignoring distributional conflicts doesn't make them go away.
More serious thinking about both current and potential conflicts could help us negotiate better solutions to them.
Children can't effectively advocate for themselves, because they don't wield votes, much less send their own lobbyists to K Street. By the time they grow up, it's too late to influence the policies that partly determine their own success in adulthood.
In Germany, concerns about the under-representation of the young have generated proposals to amend the constitution, lower the voting age to include teenagers, and give parents additional votes on behalf of their young children.
Teenagers and parents might not always use such votes well, but isn't some representation better than none?
In the United States, the racial-ethnic differences may weaken commitments to public spending on children. Census projections for 2010 show that non-Hispanic whites represent only about 55 percent of the population under 18, compared to 80 percent of the population 65 and older.
But precisely because our tax system redistributes income over the life cycle, we all have a stake in improving the productivity of the younger generation.
You can't create human capital without creating and nurturing, as well as educating, little humans.
Why not modify our national income accounts to label both private and public expenditures on children as investment, rather than as consumption?
This could help move discussions of spending on children into mainstream economic debate. It could also encourage more consideration of how the costs and benefits of investments in children should be distributed.
As recent critiques of gross domestic product emphasize, the success of our economy depends largely on the ways in which we define success.
In other words, it's the accounting, stupid.