Why we had a 6th kid
It's (some) economics
A huge personal announcement: this last week, we marginally increased our family by one member. We're very happy for our new daughter. She is our 6th kid.
I thought I'd answer the very natural question of, "Why did you have a 6th kid?"
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The economic case: costs
There is a really simple economic case for having the 6th kid. Our first four kids were born pretty close to each other: the average gap between them was 20 months. But our 5th kid is what you would call an exogenous shock. He was a total surprise five years after our fourth kid.
There's a benefit to having all of your kids close together. You can easily share toys, clothes, bedding, dishes, and lots of other childhood experiences. But after a while, you start getting rid of all of those things. Thus, there is a certain gap after which you have to start from scratch. I don't know what the minimum gap is, but I can tell you five years is definitely past it.
We thought we were through the baby stage, but once again, we were buying the ABCDs: apparel, bottles, crib, and diapers. Some of these are variable costs, meaning they increase as you have more kids. For example, diapers just keep coming. But some of these are fixed costs, meaning you spend it once and then you use it at zero marginal cost. A crib or bottles fit here.
Moreover, there's another fixed cost. This fixed cost is so subtle that a Nobel laureate forgot about them.
Gary Becker wrote "An Economic Analysis of Fertility" to explain how people choose the number of children they have. He introduced the quantity-quality tradeoff. People get utility from the number of kids they have, but they also get utility from the average quality of their kid. Quality is roughly equal to the amount of human capital the kid gets, and human capital comes from investing in them. There's a tradeoff because, if you assume income is fixed, as you increase the number of kids, the average investment per kid (i.e. the average quality) has to go down.
Becker treated those investments as a variable cost. But it's easy to argue that some are fixed costs. When I read to my kid, I can add a second kid to the audience at zero marginal cost. In fact, I read Harry Potter to my four kids at the same time for exactly the same time investment it takes to read to one kid.
This is really interesting, because it means you can hack your way to higher quantity and higher quality at the same time. With lower birth spacing, you can spread your fixed costs over more kids, lowering your average cost of quality.
And that's why when friends have asked, "Why are you having another?" I just respond, "We've already incurred all of our fixed costs, might as well get the next one at low marginal cost." (Seriously, this is a thing I say, and it gets people wondering if I'm a parent or a firm...por qué no los dos?)
You know that friend who is thinking about kids? Or the one who absolutely hates them? They probably would enjoy this newsletter.
The personal reasons: benefits
While the economics worked in our favor, there's also the personal nature of it. Our family is very active in the Church of Jesus Christ of Latter-day Saints. As part of our faith, we not only believe that family is an important part of life, it is the most important part. So the marginal benefit of kids is high. That doesn't mean it's infinite—we still have kids up until the marginal benefit equals the marginal cost. Since the marginal cost of the next kid had gone down, we felt like we were still at a place where the marginal benefit was high enough.
And the marginal benefit is high! When we discovered we had a surprise pregnancy, we were scared at first. This was going to require sacrifice. But I said from the beginning, "Even though it's a shock now, we'll quickly get to a point where we'll wonder how we ever could have lived without them." And it's true. The surprise baby is such a joy, and the sixth one is already a precious part of our family.
Does this mean I might miss out on academic opportunities? Yeah, probably. All of the other kids caused that too. Does it mean I might not make as many YouTube videos? Yeah, probably as well. But all of those are pretty small sacrifices compared to the joy of wrestling with my kids.
Weekly Trivia
In last week’s newsletter, only 19% correctly answered that the longest highway in the world is the Pan-American Highway. At 30,000 km, it’s nearly three times longer than the most popular answer, the Trans-Siberian Highway.
Since Gary Becker was a Nobel Laureate, let’s go with that theme.
Links I Liked
Interview with Joe Price, Labor Economist
My undergraduate adviser was recently interviewed by Scott Cunningham. He talks about his research around these quality-quantity tradeoffs. Also, Scott regularly interviews some banger economists, so subscribe to him if you want more.
Betting market on LK-99 superconductor
The big science news has been whether there’s a room-temperature superconductor. While tons of teams are trying to replicate the result, there’s a betting market on whether they will succeed. These betting markets try to leverage the wisdom of crowds with economic incentives. There’s also one on who will win the cage match: Elon Musk or Mark Zuckerberg. I don’t know much about superconductors, but I can tell you that Zuck is severely underpriced in that bet (conditional on a match happening).
Wait until the 2nd child finds out you said they're not as beneficial as the 1st one 😉