It's really a no brainer to have large child subsidies since they're worthwhile spending as a way of improving child welfare even aside from any fertility impacts.
This is a terrifying article -- not just because it is dead wrong, but because it represents the petrified state of economic scholarship. At a time when humanity desperately needs economic systems that can address the mess we've made of the modern world, economists still blindly ignore externalities (pollution, health effects, climate impacts), wasteful inefficiencies (plastic waste in the oceans and now microplastics in our brains), the impacts of runaway inequality, the loss of wildlife (down 70% in 50 years) and wildlife habitat, etc.
The authors are eager for new ideas from the yet-to-be-born while producing no new ideas that solve any of these problems. Circular economies, donut economics and other models need more attention, have one characteristic that is lost on traditional economists -- they echo the patterns of nature itself, which seeks to maximize efficiency and minimize waste as a fundamental part of each of its designs. In an age of unprecedented technological innovation, sclerotic economic thinking denies the possibility of vastly enhanced productivity methods that smaller working sectors might use to support their top-heavy population of elders. It's a math problem, and one that needs serious attention.
Finally, you don't need math to see the horrors of modern life. Drive any crumbling traffic-choked four-lane highway past endless parking lots filled with massive vehicles used by consumer-addicts to buy more stuff to hoard into their pricey housing units, and you see a vast panorama of the widespread high anxiety unhappiness of contemporary American life. Humans can't even manage the populations we have now, even in the richest parts of the world -- or the inevitability of food and water shortages to come, as climate change finally works itself into the attention of world leaders, and economists. Of course, by then it will be too late.
We include estimates of the effects of climate change in our estimates of the net subsidy; in order to demonstrate that our estimates are insufficient you would need to show some combination of 1) climate damages rise much faster in population than we estimate (for the marginal value of a birth to be negative for an average utilitarian the climate elasticity would need to exceed 8.7 vs the 1.18 we use) or 2) optimal annual climate change mitigation spending + damages much exceed 4.4% of GDP (specifically it would need to be 189% i.e. you also need to show some large elasticity differences regardless).
Thank you for responding to my comment -- and sorry, but it actually supports my point. Recent estimates suggest annual global climate costs will be $38 trillion by 2049, up from $0.14 trillion in 2023. (The source paper points out that climate damages already outweigh mitigation costs.) Though not a climate elasticity calculation, the increase is a percentage in the tens of thousands (over 1000% annually). While climate damages are now roughly and "only" 0.14% of GDP, they would exceed 16% of GDP by 2050 (using the lowest of 3 available GDP forecasts). This does not include mitigation spending, which is likely to remain a fraction of what is necessary due to political inaction.
I have no argument with your numbers, except that they defy common sense. The idea that the benefits of adding to the billions of people swarming all over the planet (more ideas, distributed cost of goods, full altruism/raw happiness) will offset these show-stopping climate costs is risible.
For the sake of humanity (and your own credibility), look at what credible climate researchers and responsible economists (there are a few, apparently) have been telling us for years. Or just look out the window, or at the world stage as the physics of climate disaster plays itself out. If ever there was a thinking-outside-the-box moment for economists, this is it.
Billions of people (mostly women) don't receive the education and other opportunities they need to contribute new ideas. Until we fix that problem, adding more babies just stretches existing educational and other resources even more thinly
This proposal is optimal fertility subsidies for the US; it has no effect on educational resources per capita elsewhere. Transfers to developing countries to improve their ability to contribute to science are very much desirable today, but will also likely reduce (global) fertility rates further and so further increase the benefits to boosting fertility in any specific jurisdiction, ceteris paribus.
I am generally all for more people, as I agree with the assertion, "more people are good." But a thought that I had while reading this was that if we were to successfully increase fertility via subsidy to the optimal rate, there would likely be adverse effects for the first generation that are born at that rate. Will there be enough spots at top colleges to maximize those who would normally contribute some great idea? Will there be enough jobs to support a massive influx of entry level workers? If not, I fear we could end up in a situation like Italy or Greece, with high levels of youth unemployment and unrest.
The absolute increases in fertility discussed here aren't titanic - cohort size would only rise by 39%. Supply should be sufficiently elastic for most services to accommodate this - and importantly firms and public bodies would have 2 decades or more in advance to prepare.
It's really a no brainer to have large child subsidies since they're worthwhile spending as a way of improving child welfare even aside from any fertility impacts.
This is a terrifying article -- not just because it is dead wrong, but because it represents the petrified state of economic scholarship. At a time when humanity desperately needs economic systems that can address the mess we've made of the modern world, economists still blindly ignore externalities (pollution, health effects, climate impacts), wasteful inefficiencies (plastic waste in the oceans and now microplastics in our brains), the impacts of runaway inequality, the loss of wildlife (down 70% in 50 years) and wildlife habitat, etc.
The authors are eager for new ideas from the yet-to-be-born while producing no new ideas that solve any of these problems. Circular economies, donut economics and other models need more attention, have one characteristic that is lost on traditional economists -- they echo the patterns of nature itself, which seeks to maximize efficiency and minimize waste as a fundamental part of each of its designs. In an age of unprecedented technological innovation, sclerotic economic thinking denies the possibility of vastly enhanced productivity methods that smaller working sectors might use to support their top-heavy population of elders. It's a math problem, and one that needs serious attention.
Finally, you don't need math to see the horrors of modern life. Drive any crumbling traffic-choked four-lane highway past endless parking lots filled with massive vehicles used by consumer-addicts to buy more stuff to hoard into their pricey housing units, and you see a vast panorama of the widespread high anxiety unhappiness of contemporary American life. Humans can't even manage the populations we have now, even in the richest parts of the world -- or the inevitability of food and water shortages to come, as climate change finally works itself into the attention of world leaders, and economists. Of course, by then it will be too late.
We include estimates of the effects of climate change in our estimates of the net subsidy; in order to demonstrate that our estimates are insufficient you would need to show some combination of 1) climate damages rise much faster in population than we estimate (for the marginal value of a birth to be negative for an average utilitarian the climate elasticity would need to exceed 8.7 vs the 1.18 we use) or 2) optimal annual climate change mitigation spending + damages much exceed 4.4% of GDP (specifically it would need to be 189% i.e. you also need to show some large elasticity differences regardless).
Thank you for responding to my comment -- and sorry, but it actually supports my point. Recent estimates suggest annual global climate costs will be $38 trillion by 2049, up from $0.14 trillion in 2023. (The source paper points out that climate damages already outweigh mitigation costs.) Though not a climate elasticity calculation, the increase is a percentage in the tens of thousands (over 1000% annually). While climate damages are now roughly and "only" 0.14% of GDP, they would exceed 16% of GDP by 2050 (using the lowest of 3 available GDP forecasts). This does not include mitigation spending, which is likely to remain a fraction of what is necessary due to political inaction.
I have no argument with your numbers, except that they defy common sense. The idea that the benefits of adding to the billions of people swarming all over the planet (more ideas, distributed cost of goods, full altruism/raw happiness) will offset these show-stopping climate costs is risible.
For the sake of humanity (and your own credibility), look at what credible climate researchers and responsible economists (there are a few, apparently) have been telling us for years. Or just look out the window, or at the world stage as the physics of climate disaster plays itself out. If ever there was a thinking-outside-the-box moment for economists, this is it.
Billions of people (mostly women) don't receive the education and other opportunities they need to contribute new ideas. Until we fix that problem, adding more babies just stretches existing educational and other resources even more thinly
https://crookedtimber.org/2024/01/12/mute-inglorious-miltons/
This proposal is optimal fertility subsidies for the US; it has no effect on educational resources per capita elsewhere. Transfers to developing countries to improve their ability to contribute to science are very much desirable today, but will also likely reduce (global) fertility rates further and so further increase the benefits to boosting fertility in any specific jurisdiction, ceteris paribus.
I am generally all for more people, as I agree with the assertion, "more people are good." But a thought that I had while reading this was that if we were to successfully increase fertility via subsidy to the optimal rate, there would likely be adverse effects for the first generation that are born at that rate. Will there be enough spots at top colleges to maximize those who would normally contribute some great idea? Will there be enough jobs to support a massive influx of entry level workers? If not, I fear we could end up in a situation like Italy or Greece, with high levels of youth unemployment and unrest.
The absolute increases in fertility discussed here aren't titanic - cohort size would only rise by 39%. Supply should be sufficiently elastic for most services to accommodate this - and importantly firms and public bodies would have 2 decades or more in advance to prepare.