Economists may have much to offer child development experts

November 19, 2002

In examining how and why children thrive, child development experts frequently consider the role of economic factors, such as a family's income. But they rarely incorporate the tools that economists use in studying how families allocate their resources and how their choices affect children. For those intrepid enough to use them, those tools may shed light on how families use their resources to shape children's lives, according to a new article.

"Economists' general approach to family behavior is useful for thinking about families and children," says author E. Michael Foster, Ph.D., of Pennsylvania State University. "Economics should be better integrated into research on child development."

Both economists and developmental scientists agree that children are costly: Previous research has determined that a middle-class family spends roughly $160,000 on a child's food, housing, clothing, care and education before he or she turns 18. Time costs are also substantial: Mothers devote an average of 29 hours weekly to childcare, according to previous analyses.

When they study the link between family resources and children's developmental outcomes, economists think of children as investments and have developed powerful tools that reveal the effect of resources and choices on key outcomes, such as schooling, illness and death, among others. When economists analyze how parents use resources in raising their children, they consider that the effect of those resources is fundamentally associated with how they are generated. They also consider the ways in which the same people might have used those resources if they did not have children (the "opportunity cost" of having children).

Economic tools can help clarify gray research areas, such as the effects of after-school activities. Generally, studies have found after-school activities to be beneficial, but not entirely. Involvement in sports, for example, promotes positive attitudes toward school, but also appears to encourage early alcohol use. A key challenge in research of this type, Foster notes, is that the children who engage in more of these activities may differ from those who do not in key developmental ways. The tools of economics, he says, are "especially useful" in separating the benefits of these activities from the effects of other influences on the children's actions.

"The good news here is that economics offers additional analytic tools that are only beginning to be used in this area," says Foster, whose article is published in the current issue of Child Development.

Economics also widens the range of questions for researchers to consider, according to the article. For example, the law of diminishing marginal returns prompts economists to ask how many after-school activities are too many. The concept of substitutes and complements prompts consideration of whether children are better off focusing on a single type of activity or a wider array, and whether after-school activities widen or narrow the between-sibling achievement gap.

"Currently, we know very little about these questions, " says Foster. "They represent potential opportunities for economists and developmentalists to collaborate."

The economic model also can help broaden perspective on another controversial issue: day care. Many studies have found differences between children who attend day care and those who do not. But to get a true picture of day care's effects, one must take issues like family resources, preferences, parental attitudes and potential child behavioral problems into account.

"In the economists' world, it seems obvious that children and families who are using day care would differ from others even apart from the effect of day care per se," says Foster. "To understand the effect of day care, therefore, one really has to understand the process by which families decide whether and how much day care to use."

Studying these questions, an economist might use a research technique involving data on siblings that assumes brothers and sisters are more similar than unrelated individuals and attempts to distinguish the effect of something like day care by studying siblings with differing day care attendance.

However, the article points out that economists would benefit from collaboration with developmental experts.

"It is difficult to incorporate relevant factors like warmth into a model that begins with the notion that a family is a little factory," Foster says. "Economists have a lot to learn from developmentalists about measuring child outcomes, such as emotional well-being."
Health Behavior News Service: (202) 387-2829 or
Interviews: Contact E. Michael Foster at
Child Development: Contact Angela Dahm Mackay at (734) 998-7310 or

Center for Advancing Health

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