Diapers and Deadlines:
The Opportunity Cost of Raising Kids
By Katelyn Postiglione
Many parents have a hard time balancing their two lives: work and home. At work, many employees work on teams and have multiple people working on the same project. For some employees, personal assistants can be delegated many of the simpler tasks, but what can be done to help in the home? According to the Bureau of Labor Statistics, in 2014, 60% of families have both parents working. As a result of more than half of parents now working full 40-hour weeks, finding a reasonable “work-life” balance seems impossible without a little help. With limited options for those trying to balance hectic work schedules with raising a family, they must make sacrifices in order to accomplish their compromised goals.
These sacrifices are what economist consider opportunity costs, which can be defined as the benefit of an alternative that must be forgone in order to pursue a certain action. Although deadlines and diapers are not exactly the same thing, the trade offs associated with being a full-time parent and a full-time employee have one thing in common–they both need a lot of time. According to an Economist article, “Why is Everyone so Busy,” ‘time is money’. So, leisure time would be considered a costly misuse of hours spent as it could be spent in the office, especially if those jobs pay well. These workers may be willing to pay to have someone pick up their kids from school and play with them until they come home from work if the benefit (the hourly wage the parent earns) outweighs the explicit cost (the hourly wage the childcare costs) and the implicit cost (the time missed out strengthening the bond between the parent and child).
However, according to Jeff Opdyke, a writer for the Wall Street Journal, many parents have imperfect information in regards to the costs and benefits associated with raising a child. In fact, when he questioned parents on the benefits of having their children, many parents didn’t have an actual answer in how these children benefitted them in the short term, since the children were completely in need of the parents support, time and money. When Opdyke asked the same questions to parents of grown children, parents were able to recognize the social benefits of raising a child. Opdyke concluded that parents do not recognize the benefits of having children until years later, when they are grown. According to an article from U.S. News, the annual cost of child care is higher than a year’s tuition at the average four-year public college. To add to the cost of having a child, include the thousands of dollars spent on food, clothing, and extracurriculars. With child-care being the second highest monthly expense for middle-class families, it can be concluded that the risk of not watching a child's first steps is outweighed by the monetary benefits of work. Therefore, what happens when a family has enough money?
The article, “Why is Everyone so Busy” states that financially-sound families are more willing to invest time in their children and believe that by spending this time they are transferring the knowledge and skills they have learned in order to help the children to succeed. Although parents are ultimately the ones to pass privilege on to their children, money can buy almost anything–including a perfect nanny. A good nanny would pick up the kids and not burn down the house, but a “perfect nanny” could do so much more. Yet, a perfect nanny might be incredibly expensive, as co-founder of NPR’s show, “Money Planet,” Adam Davidson discovered while interviewing nannies. One nanny made close to $180,000 a year. Many of the nannies he had interviewed would have worked perfectly. With some nannies charging $25 per hour, Davidson felt his nanny should be more than just “qualified.” He and his wife asked themselves countless questions about the quality of time the nanny would spend with their son, and what types of skills he could learn from her. In other words, would the marginal benefit be greater from having a nanny who acts like a second mom and entertainer, or someone who give more skillful lessons in language. These “perfect” nannies will cost a pretty penny, but is the extra cost worth it if your child is able to speak Mandarin by age four?
It finally boils down to parental preference in what the parents value most in child care as the options seem limitless. The ultimate choice is going to depend on what type of child care fits the family's needs best, no matter the cost. Learning Mandarin may be beneficial, but not if the child can only speak to his nanny. With parents constantly trying to balance all aspects of their lives, the help from childcare can maximize their earnings, but at the cost of family time. Families with higher income jobs are often willing to spend more time at home, while those who need the extra hours in the office make the sacrifice to have someone else watch their children. For each family, there will be a difference in the importance of deadlines and diapers but each considers these factors to find its own balance.
About the Author: Katelyn Postiglione
As of May 2016
Katelyn Postiglione is a junior at Pace University majoring in Marketing. Katelyn enjoys photography, roller blading and writing. She has found an interest in Economics through her electives and hopes to continue to write for On the Margin into her senior year.