Dakka Does Not Disproportionally Motivate The Poor
You would think that it would do this. We all assume they would do this. One of the objections to fixed payments for parents is that this could result mainly in poor people having more kids, since you would assume richer parents would respond a lot less.
I don’t think this would hold if you scaled the amounts, but also I’m surprised by the result in the first place?
Lyman Stone: So I went back through all those studies to check and see if they reported heterogeneity tests. Spoiler: many did. In total, from 60 initial intervention estimates, I was able to find 23 estimates of effects specifically on low-income people, and 24 for middle/high.
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So we use that standard cost estimate from my study in May, and we apply it symmetrically to lower- and higher-income treated groups alike? This is basically saying “For a fixed budgetary spend, which group boosts fertility more?”
There’s basically no difference: if you give a middle/high earner $3,000 to have a kid, their odds of having a kid rise by essentially the identical amount as if you give a low earner $3,000 to have a kid.
A lot of people have this mental model where effects should always scale with income, but this is obviously wrong for a lot of effect types! If I give somebody a $10 hamburger voucher, poor people will not by 4x as many hamburgers even though it’s 4x the share of their income.
The reason is that it is a voucher for hamburgers and the price of hamburgers is relatively fixed with respect to income. Sure rich people may go to a bougier place and poor people a cheaper one, but by and large most people are going to purchase pretty similar hamburgers.
Despite the cultural narratives purporting to tell you there are absolutely massive class differences in parenting, the actual fact of the matter is the economic costs associated with how people would prefer to parent are actually not that variable across most of the income spectrum.
There are obvious exceptions. Private schools, extra space and hired help are obvious ways in which richer people will spend a lot more money. Despite this, the differences are not that vast, and we get this very interesting result.
It looks to me like the plot does not match the text. Maybe I’m not reading it right?
On the x axis, the plot has “benefit as % of income”. On y, it has “increase in probability of having a child”. The plot shows that the trend line for rich people is the same as the trend line for poor people. Since x is in % of income, this means that if you make 2x, you need 2x benefit to increase birth probability by the same amount. So it would be proportional to income, instead of independent like the text says.
It looks to me like the plot does not match the text. Maybe I’m not reading it right?
On the x axis, the plot has “benefit as % of income”. On y, it has “increase in probability of having a child”. The plot shows that the trend line for rich people is the same as the trend line for poor people. Since x is in % of income, this means that if you make 2x, you need 2x benefit to increase birth probability by the same amount. So it would be proportional to income, instead of independent like the text says.