Pricing the priceless child 2.0: children as human capital investment

Abstract

This article takes Viviana Zelizer’s (1985) Pricing the Priceless Child to the new millennium. Zelizer documented the transformation between the 19th and 20th century from an “economically useful” to an “emotionally priceless” child. She observed that by the 1930s, American children were practically economically worthless but invested with significant emotional value. What has happened to this emotionally priceless child at the dawn of the new millennium? Has there been a new transformation in the social value of children, and, if so, what might have such a transformation entailed? To address these questions, we examine overtime trends that point to increasing devotion of resources and time to children’s education, a key input in the exceedingly influential human capital theory, which connects investment into children’s human capital with their future market value. Therefore, we argue that the priceless child 2.0 is a useful-to-be human capital investment child. We use four empirical examples of overtime growth in children’s human capital investment: (a) enrollments in early childhood education, (b) federal spending on early education, (c) federal spending on K-12 programs, and (d) parental spending on child care, education and extracurricular activities. In the conclusion, we discuss some potential consequences and concerns about raising children as human capital investment.

America's Parenting Economy: How the Ideal of Parental Investment Scaffolds Family‐Hostile Policy

“…In an article published in 2019 in the Annual Review of Economics, Doepke et al write about three themes in parenting that are relevant for building children's human capital, another central economic concept (cf. Bandelj and Spiegel 2022). Consistent with rational choice theory, these economists theorize that the first choice that parents make is to pick a parenting style: passive (refrained intervention in child's behavior); authoritarian (imposing a parent's will on a child through coercion); or authoritative (imposing a parent's will on child through persuasion).…”