Sunday, November 09, 2008
Childbearing and Incentives
Chris Dillow proposes a Pigovian tax on parents "whose children do badly at school." Some of his commenters complain that poor educational performance might be more the fault of bad schools than bad parents. But this misses the point. The tax is not meant as punishment for bad parenting. It simply serves as an incentive for those in a position of influence to prevent an unfortunate outcome, namely the existence of a child who will likely go on to be a burden to society. Even good parents shouldn't bear kids into a bad situation, i.e. one where it is foreseeable that they will go on to flunk out of school, become criminals, etc. It's not their fault, but if that's the situation they're in, it might nonetheless be better for society were they not to have children. And a well-tailored tax policy will seek to 'nudge' individual incentives into line with social utility, no?