The Son Also Rises: Policy Implications

What could policymakers do to apply the results of The Son Also Rises: Surnames and the History of Social Mobility? (see my previous posting regarding this book for context)

Countries that accept immigrants could adjust their criteria, including “point systems”, to include factors that the author, Professor Gregory Clark, says are likely to make people and their descendants successful. Instead of simply asking about the education of the potential immigrant, for example, priority for immigration might include the education of the potential immigrant’s parents, grandparents, and other relatives (especially important here in the U.S. because those members of the extended family are often entitled to immigrate here as well).

Countries anxious to have a lot of future high-bracket taxpayers could encourage “high status” and “socially competent” parents to have more children. What would that look like? In terms of financial incentives, pretty much the opposite of the current U.S. system. For example, the IRS reduces your taxable income by $ 3,950 for each child. But under the “Phaseout of exemptions,” this benefit begins to disappear when a single person’s income is $ 254,200. Why not have the child exemption be a percentage of income so that it is significant even for high-income parents? As a starting point, since in theory each state has already calculated the cost of rearing children for its child support guidelines (federal law requires that “economic data” be used to create these and they’re supposed to reflect actual spending by parents on children), a married couple with two children could deduct the child support amount that the children would generate if one parent were to sue the other in their state of residence.

A lot of “high status” and “socially competent” women have important jobs these days and don’t want to take time off work to be pregnant, give birth, care for children, etc. The government could clean up some of the laws and regulations around surrogacy so that it was easier and cheaper to hire a surrogate (see this posting for how the woman who carries the baby gets paid less than the paper shufflers). The government could also expand the number of agencies that can bring in au pairs so that au pairs were cheaper (right now just a handful of agencies are selected by the U.S. government and they earn monopoly-style profits). If the expanded tax exemption system above is not implemented, the government could make payments to a nanny or au pair fully tax-deductible, thereby taxing working parents only on the profit that they make from work rather than the revenue.

A lot of “high status” and “socially competent” people are abandoning the suburbs due to traffic congestion (previous posting). Even if they have a high income to go with their high status, the cost of rearing multiple children in the city may be unaffordable due to the cost per square foot of real estate and the need for private school. These people might have more children if either (a) congestion pricing were implemented so that it was possible to live in the suburbs and commute, or (b) schools in the city were improved to the point where high-status parents wanted to send their kids there. (I put forward some ideas for improving schools in my Economic Recovery Plan document.)

What do readers who’ve read Clark’s book think? What other policies would change if we were to put these results to use?

Philip Greenspun’s Weblog

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