Birthday presents at school parties

I’m on the record as being against preschool classroom Valentine’s Day parties. As Scrooge said, people are “spending the mortgage money on frivolities”. The parents sending in gifts is the pinnacle of the rotten heap. I would abolish daycare Valentine’s Day parties entirely – outlaw them like those super sized soda cups.

Now, with Covid subsiding and my son in elementary school, I’m getting to see school-aged-kid birthday parties (as I mentioned yesterday). The parties as events that build social capital are great. The gifting aspect of it is mostly dumb. I abhor waste. I put “no gifts” on the birthday invitation for my son.* Most guests brought a present anyway. Next year, should I write “if you bring a gift I will burn it in the driveway before you can enter”? These parents would say they are worried about the island of plastic trash in the Pacific, but what do their actions tell?

It would be nice if school birthday parties could adopt the white elephant/Yankee swap convention that keeps present volumes down at Christmas/holiday parties, but it’s impossible for logistical reasons. If it were socially acceptable to grab a lightly used board game out of your basement and wrap it up to give a school friend, that would also be better. Maybe I should write that on our invitation next year and report back to you all! What do the really really crunchy parents do?

Economists think it’s clever to say, “Haha. You thought Christmas presents were wholesome, but they are inefficient. Merry Deadweight Loss.” Personally, I like most Christmas/holiday presents for the signaling value. I’d be happy with Christmas presents if we could get plastic junk for kids under control and heavily curtail presents at other times of the year.

Related resources: 1) Alex and Tyler donned Christmas sweaters to bring you this video on Christmas gift giving 2) Zachary has written about Christmas gifts

*Do you like funny stories? My son can read. When he noticed that I had written “no gifts,” he got mad at me. I explained that people can still bring gifts if they want to. Then I was mortified when he came home from school reporting that he had told his classmates that they can still get him presents.

College Major, Marriage, and Children

The American Community Survey began in 2000, and started asking about college majors in 2009, surveying over 3 million Americans per year. This has allowed all sorts of excellent research on how majors affect things like career prospects and income, like this chart from my PhD advisor Doug Webber:

See here for the interactive version of this image

But the ACS asks about all sorts of other outcomes, many of which have yet to be connected to college major. As far as I can tell this was true of marriage and children, though I haven’t searched exhaustively. I say “was true” because a student in my Economics Senior Capstone class at Providence College, Hannah Farrell, has now looked into it.

The overall answer is that those who finished college are much more likely to be married, and somewhat more likely to have children, than those with no college degree. But what if we regress the 39 broad major categories from the ACS (along with controls for age, sex, family income, and unemployment status) on marriage and children? Here’s what Hannah found:

Every major except “military technologies” is significantly more likely than non-college-grads to be married. The smallest effects are from pre-law, ethnic studies, and library science, which are about 7pp more likely to be married than non-grads. The largest effects are from agriculture, theology, and nuclear technology majors, each about 18pp more likely to be married.

For children the story is more mixed; library science majors have 0.18 fewer children on average than non-college-graduates, while many majors have no significant effect (communications, education, math, fine arts). Most majors have more significantly more children than non-college graduates, with the biggest effect coming from Theology and Construction (0.3 more children than non-grads).

In this categorization the ACS lumps lots of majors together, so that economics is classified as “Social Sciences”. When using the more detailed variable that separates it out, Hannah finds that economics majors are 9pp more likely than non-grads to be married, but don’t have significantly more children.

I love teaching the Capstone because I get to learn from the original empirical research the students do. In a typical class one or two students write a paper good enough that it could be published in an academic journal with a bit of polishing, and this was one of them. But its also amazing how many insights remain undiscovered even in heavily-used public datasets like the ACS. We’ve also just started to get good data on specific colleges, see this post on which schools’ graduates are the most and least likely to be married.

School workbooks recommendation

This is a different kind of book review. If a product helps me with raising kids, I like to share it. I’m on my second book in a series of age-appropriate Brain Quest academic workbooks.

These workbooks are well designed. I’m not promising that your kids will not see it as a chore, but I think these books make practicing math and writing about as fun as it can be.

We found Brain Quest in a bookstore while we were looking for things to do in my son’s summer after kindergarten. The K-to- 1 summer workbook was fun and helped maintain what he had learned in kindergarten. He loved adding a new sticker to the adventure path after finishing each activity. You can finish it in one summer by doing about 5 pages per day, which only takes about 10 minutes.

The First Grade school-year book is huge (320 pages). There aren’t as many stickers as the K-to-1, but they still have a way of marking off accomplishments that my son finds satisfying. It’s a kind of gamification, but it’s not more screen time.

These pages can be done after school on weekdays. What I like best is that it gives us some structure to leaning on weekends and holidays. It’s cheap considering that it has every subject. The cost is nothing when you consider the price of outside tutoring.

Amazon link to K-to-1 summer workbook (160 pages)

Amazon link to First Grade book (320 pages)

The series goes up to Sixth Grade.

I don’t see this a substitute for reading together. If you only have time for one thing, I’d recommend reading a fun story out loud over assigning workbook pages. If money is no object, then paying a tutor is better because you won’t have to spend time supervising.

Day care and new pre-K findings

There was a buzz over a new study showing that pre-K is not necessarily good for children. It’s amazing how experts can be completely surprised by the results of a major study on an issue like pre-K education.* Noah Smith summarized the literature and thought through some policy implications. Emily Oster also just summarized the paper and points out that it provides almost no help for parents making decisions. **

I’ll offer some “amateur astronomer” observations about preschool and childcare.

What to call the daycare I patronize, since it offers all of the pre-K functions? I’ll call it Day-K. My kid comes home from Day-K with worksheets difficult enough for a kindergartener, but it was handed to a 3-year-old and the kid just scrawled a few lines of crayon across it. Most little kids aren’t going to retain material that is beyond their developmental level. Why bother printing these nice worksheets at all instead of just letting them color a bear?

Something that surprised me was how early kids can learn the alphabet and yet how disconnected that is from anything useful such as being able to read words. If a 2-year-old can do it (e.g. recognize “A”) then a 4-year-old can probably pick it up easily anyway.

Good private daycares in desirable urban areas are expensive but have unbelievable waitlists. Donald Shoup advocates that cities should charge more for parking. He reasoned that every city block should have an open parking space. Instead of spending valuable time circling like a vulture, you should just pay a lot of convenient parking or else know you will have to go somewhere else. Would the same logic apply to the good daycares? Should they not charge so much that there is always an open slot for the next parent who can pay? One issue with this from the daycare owner’s perspective is that they don’t want new kids cycling through constantly. A brand-new kid who does not trust the staff and has not learned the routine is a temporary disaster. I believe that the waitlists work because the owners want a predictable flow of great committed customers. By keeping fees low enough to have a long waitlist, they get good families to stay and they can easily fill any holes left by departures or dismissals.

If the program was free, I suspect that would change the dynamic inside compared to high-fee Day-K. Daycare kids are on a regimented schedule. Everyone thrives on the routine. The staff are happy when the kids know the rules. If people were coming and going unpredictably, that might make it harder for kids to learn.

Even under optimal conditions, there are scuffles at daycare. Being pushed down on the playground is often the only thing a kid will remember from a full day of “instruction”. How could pre-K actually negatively affect some kids, as the new study shows? One way I can think of is that the experience a good teacher tries to provide could be ruined by one kid who is loud or violent. If half of the classes are functioning as day care and having no impact at all on future outcomes and half of the classes have a kid hitting, then the average effect for all pre-K classes could be negative. The social environment of pre-K is probably highly variable. Sometimes you could get a great social atmosphere in which kids learn to share and sing. Sometimes the chaos level could make things difficult, I imagine. This is speculative. But I think it’s ok to speculate in the brainstorming period that should follow a surprising result.

Daycare centers have a fantastic physical environment. When I think of the returns to scale, the low table and chairs that fits the 3-year-olds perfectly comes to mind. A preschool classroom has a perfect bathroom with low toilets and sturdy step stools at the sinks. There is no heirloom China or nice upholstery in the room to worry about. There are dozens of age-appropriate toys and craft supplies can be bought in bulk. This physical environment allows kids to be creative and have fun. Adults don’t have to hover over them, afraid that they’ll hurt themselves or break something at any moment. By contrast, having a 2-year-old child roam my house was terrible. I kick myself for not making more up-front investments in kid-proofing and creating safe play areas. But it’s expensive and difficult for a parent to outfit their own home perfectly for each stage of development. The great thing about a daycare classroom for 3-year-olds is that it is perfectly fitted for 3-year-olds, because 3-year-olds will be cycling through it for the next decade. The physical scale factor makes me a daycare optimist for urban areas. However, as I wrote earlier, things could be trickier for low-density population areas.

The study has given us a lot to think about. I hope the research community can be helpful in continuing to figure out the puzzle.

One thing we can conclude, as Noah says in his blog, is that a compulsory university pre-K would be bad. Forcing families to send 4-year-olds to an institutional program (the way 5-16 kids are regulated) would be an expensive “own goal” policy. I don’t know of anyone seriously considering that, which hopefully means that nobody is.

* As a lab experimentalist, I’m used to being surprised by data. Check out this podcast just recorded with John List. He talks about surprising findings from field experiments. You never know until you run the experiment. Hence, my post in September about a rant about behavioral economics.

** Yesterday, Emily Oster announced that she is leaving Twitter because it had become a toxic place for her. You can still find her at substack, instagram, and other traditional publishing outlets (e.g. her books).

Fiction for Christmas

I hacked Christmas this year to get two books I had been hearing about from reviewers and friends: Project Hail Mary and My Struggle by Knausgård. I wrapped the sci-fi one for my husband, because he will like it. I handed the weird one to him and asked him to wrap it for me. I killed many birds with one stone. The people who read econ blogs will appreciate my accomplishment.

Right after Christmas I had a plane trip that provided some reading time for My Struggle. I like it. As a warning to others, I wonder if the reason “everyone” thinks it is so relatable is that the types of people who review books share the author’s burning desire to be a writer.

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Joy on Books 2021

The non-fiction book for adults I recommend this year is Liberty Power by historian Corey Brooks. If you have ever cared about social justice or affecting change, then wouldn’t you be curious to know how the abolitionists really did it around 1850? How, practically speaking, did a handful of people with moral convictions rid the United States of legal slavery? Abolitionists were striving and scheming to use the newly minted American democratic political system to their advantage even though they were in the minority. One of their big decisions was to start a third political party after they grew frustrated with slavery-complicit Northern Whig politicians. I blogged here about the connection with current politics.

I had a huge gap in my knowledge of American history before reading this book. Nothing that happened between George Washington and the Civil War seemed interesting, until this book created a narrative that I cared enough about to follow. History books might not be the perfect gift for everyone, but I bet no one in your family already has it!

Another book I reviewed earlier is Emily Oster’s The Family Firm, which any parent of young children would probably find helpful if they like research.

When I’m not reading for work, I read to my kids. I strongly recommend, for kids aged 6-12, The Voyage of the Dawn Treader. This ties into Liberty Power, because the main characters abolish the slave trade on one of the islands they sail to!

Before reading Dawn Treader, you should certainly start with the book that sets up the world, The Lion The Witch and the Wardrobe. I have a tip for younger kids: start reading this book right at the point where Lucy walks into the wardrobe for the first time. Younger kids won’t miss the first few pages that explain how the 4 children came to be in the old house.

For 4yo and 5yo kids, I recommend Aesop’s fables. These are short and self-contained. There are many versions of fable books for kids with good illustrations.

In addition of my specific plug for the Narnia series, I encourage parents to read fantasy with children. I see a lot of children’s books that promote science or STEM-readiness. My son enjoys learning about dinosaurs and nature, however I am certain that he’s learned the most from the conversations we have had about adventure stories.

Reading to your kids is costly in terms of time. We have limited time, so let me make an argument for dropping some of the other competing activities. I speak as someone who professionally teaches hundreds of college students to program. Those games that try to trick 5-year-olds into “programming” are less valuable than reading and discussing fantasy stories.

Inspire them with the story of a ship sailing to unknown islands. Talk about how a lovable band of flawed characters can escape from a clever magician. What your child will need to be able to do when they are 20 is read and comprehend a textbook that explains a totally new technology that no one alive today understands. Then they will need to think of creative ways to apply that technology to real world problems.

The high cost of day care and demographics

When I moved half-way across the country to take a new job, I had no local support system for my 2-year-old. Putting him in a full-time day care was the plan. I wanted a day care center with a good reputation that is located near work and home. My story, like so many others, includes phone calls and long wait lists. At first, it was hard to understand how I could be willing to pay for a service and it could just not exist.

Opening a large daycare center is risky. Who wants to take that risk? I joked that I’d quit my professor gig and start a daycare in response to the huge demand. Of course, I did not. Fortunately, I don’t live in one of the American counties that lost population over the past ten years.

The WSJ on demographics describes this situation in a shrinking county:

In Lincoln County, Kan., pop. 2,986, about 40 miles west of Salina, Kan., economic development director Kelly Gourley set out to build the county’s first day-care center not run out of someone’s home. A child-care shortage was making it difficult to work and raise children, she saw. The town’s handful of in-home daycares were the only options, and they tended to come and go.

Ms. Gourley estimated it could cost as much as a half-million dollars to build the facility, and she didn’t think it could weather fluctuations in demand. “In a rural community, you lose one kid and you might be in the red all the sudden,” she said. She shelved the plan and instead is working to increase the supply of in-home caretakers.

Allison Johnson, a 32-year-old nursing home speech pathologist, grew up in Lincoln County and hoped one day to have three children. She no longer thinks that is feasible after she had to wait a year to get an in-home daycare spot when her first child was born. Now she and her husband, who owns a residential-construction business, are trying to figure out how they would juggle having a second child.

Her father, a farmer, watches her son, now 2, when her in-home daycare provider isn’t available. But he and her brother are in their busy season, and “they’re not going to be able to do anything but throw him in the tractor.”

There are attractive economies of scale for day-care centers. This economic fact is part of the reason that young people are leaving rural areas, which in turn makes it harder for rural areas to support services for young families.

There has always been a huge amount of value created at home within families that is not fully captured by GDP. As more childcare is moving to the formal market, we are starting to see just how valuable those services are that used to be provided in the family.

Whatever your views on the matter, it’s not surprising that politicians are talking about subsidized day care.

Allowing for flexibility through policy moves like vouchers and de-regulating in-home daycares is important. Some communities can’t support a day-care center facility, like the one in this article. I think the if you build it they will come philosophy, if applied too widely, would be hugely expensive and not efficient. On the other hand, there could be situations in which more day care would be provided if the local government would take on some of the risk currently faced by entrepreneurs.

Markets in Everything for Christmas Decorating

Last year I blogged about a service to create your kid’s school Valentine’s cards.

Now, the temperature in Alabama has dropped to a chilly 71 degrees and the pumpkins are out. It’s time for parents to start worrying about who is going to create holiday magic at home.

You can pay someone to do this. An enterprising local has already posted this in a neighborhood group.

Creating holiday magic is a wonderful thing. There are huge positive externalities to even a simple string of lights around your front door. I love it. Creating the magic is also a lot of work. As someone who is forever swamped at work and has already booked three weekend work trips for Fall 2021, my willingness to pay for this service is positive. (I can’t afford this particular service, nor do I need my Christmas tree to look like the one in her picture.)

The rich have always had extra hands to manage their estates. I have a feeling that the percent of households for which this might be a paid service is expanding. There are women in the comments asking this crew to come over.

Covid, Cars, China, Crypto, Corruption

We generally do long “effort posts” on specific topics here, but today I’m mixing things up with 5 quick updates.

  1. Covid My daughter got sent home with a cough Tuesday, which meant I cancelled classes Wednesday to hang out with her until we get a Covid-negative PCR. Last Thursday my son’s public school was closed for Yom Kippur, and I got so focused on hanging out with him I forgot to post here.
  2. Cars My wife bought a new used car last week. We’ve covered here how car prices have jumped up while inventories fell this summer, and the latest numbers show that used car prices are now falling slightly from very high levels while new car prices continue to rise. While actually buying a car, the low inventories stood out even more than the high prices. Several times we saw a promising car online, only to call or visit the dealer and find out it had sold the day before. The new Nissan Leaf sounds like an excellent value at its sticker price, but none were available in Rhode Island, and no blue ones anywhere in New England.
  3. China Scott covered the collapsing Chinese real estate market on Tuesday. I’ll just pass along the takes I’ve seen from Western economists and China-watchers Michael Pettis and Christopher Balding, which is that this is a big deal that will slow Chinese growth for years but is unlikely to precipitate a 2007-style financial crisis. I find Balding’s argument that financial contagion will be limited to be convincing partly because of his actual arguments about quasi-bailouts, and partly because he almost always argues that “things in China are worse than you think”, so if he says “Evergrande isn’t Lehman Brothers” I listen.
  4. Crypto Tuesday I met the co-founder of a new crypto-based prediction market, Melange, which sounds promising. The prediction market space is growing rapidly with PolyMarket and Kalshi joining the older PredictIt.
  5. Corruption Last week the World Bank announced it is discontinuing the Doing Business report/ranking due to apparent corruption; top Bank officials in the middle of raising money from countries including China pushed to raise the rankings of those countries beyond what the data justified. I hope another organization steps up do continue the good parts of the Doing Business report in a more trustworthy way.

Video Games: Emily Oster, Are the kids alright?

On Monday, China announced that kids under 18 will be limited to only 3 hours per week of online gaming. Those hours are scheduled for the evenings of Fri-Sun with a 9pm cut off. Go to bed, young man!

Last month I reviewed Emily Oster’s new book The Family Firm. In light of China’s ruling over how kids spend their free time, I’ll explain her view of video games.

Interestingly, she does not have a chapter called ‘Video Games: Do we need the CCP to intervene?’ She has one chapter near the end called Entertainment that includes video games and screen time. She writes at the beginning of the chapter that, “Screen time strikes fear in the heart of many a parent.” Most parents, at least among her audience, have their own smart phone and at least one TV in the house. It is such a relief, honestly, to get the kids to sit down and stop making trouble in the 3-D world. In What Women Want I wrote about a wealthy celebrity mom who has a nanny and a cook. She spends quality time with her kids, when she wants to. Most of us can’t afford a weekend nanny, but we might leave our kids with technology when we need a break. (I believe, with no data to back this up, that childhood mortality is down partly due to screens keeping kids off of cliff ledges and out of abandoned mines.)  Then, at the end of the day, we worry that they have spent too much time on screens.

Oster writes, “Screens change your brain, say the headlines. (Spoiler alert: Everything changes your brain.)” Parents like me have come to love Emily Oster’s ability to cut through the noise. Everything changes your brain. Video games are not a completely separate new form of human experience.

Helping a child’s brain develop is a big responsibility. We know that you can mess this up, most obviously in the cases of serious abuse. So, can you put on Sesame Street while you make dinner? Should you allow your son to play video games?  I’ll put the rest under Read More.

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