The Microeconomics of Childhood

The response to my recent When the Legs Go Numb post has been overwhelming. I haven't responded to all my e-mails yet, but trust me, I see you! I appreciate that the post struck a nerve and added to many people's parenting journeys. A handful of people had an interesting observation, though. They loved my ideas about paying kids for performance on voluntary projects, but it doesn't work for their kids. Why? Because their kids don't seem to be interested in earning money.

Now, I'm pretty sure their kids are humans......highly likely! If so, their kids DO have wants, and if that's true, they ARE interested in money (or at least what money can provide). It's not a want problem; it's a microeconomics problem. It's simple supply and demand. We'll call it the microeconomics of childhood.

Let's say you're practicing the very principles I talk about. Don't pay your kids an allowance. Offer them projects to complete in exchange for performance-based compensation. They work, get rewarded, and use said reward to spend/save/give. Cause and effect. Input and output. All is good with the world.

Back to the issue. Many people's kids aren't motivated by money. They don't seem to care. They would rather not work than earn compensation through work. Here's the next question I ask them: Do you regularly buy things for your kids that they want? "Well, yeah, of course!" "Usually." "If we're having a good month, yeah."

This is the microeconomics issue. When we regularly purchase wants for our kids, the supply of money in their lives is high. They may not physically possess the money, but they have access to the money they need to get the things they want. Therefore, the demand for work is low.

I think it's important we parents flip that around. We need to lower the supply of money in our children's lives, thereby increasing the demand for money (i.e. the desire to work). Here's what it looks like in my house:

"Dad, I want a ______."

"That's awesome, bud! Do you have money to buy it?"

"No, I only have $5."

"That's too bad. But if you want to make some money, we have lots of projects you can do."

Pax worked so hard to buy this RC car!

This has happened countless times, occasionally accompanied by tears. If my kids want something badly, I don't want to demean or disrespect that want. Rather, I harness it to encourage the healthy behaviors that result in them earning the money to buy said want. The supply of money is low, creating a higher demand for work.

We're taking a family vacation soon, and my kids know it's their responsibility to have money for souvenirs. As such, They've been working their butts off. It's not because they are the most perfect kids. Had we told them we would buy them whatever they wanted on the trip, their desire to work would be zapped.

So, next time you get frustrated that your kids aren't responding to work the way you had hoped, inspect the microeconomics of childhood in your house. The answer probably lies somewhere in that department.

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