Paid versus Unpaid Work: A Bedtime Story

Let me tell you a story:

Once upon a time in a faraway land, there lived two girls, Anna and Bess. Each was a single mom with a one-year old to care for. Their pregnancies were such that their families deeply disapproved and banished them. Instead, both relied on a government program that gave single moms $10k/year. It was a hard life, but they were just able to scrape along. The 10k program was the only form of support in this land.

Moreover, this was a world of big data---everything was measured very carefully. One day, a social worker visited each woman and measured her mothering output thanks to a new gadget, the Workatron 6000. When looking after her own child, the Workatron showed that each woman produced 2 units of mothering. The social worker then had them swap--when looking after the other's child, the Workatron showed that each mom was less effective, producing only one unit of mothering when looking after the other's child. Finally, the social worker studied whether there were economies of scale, having each mom look after both kids for a day. She discovered the opposite--the Workatron showed that each kid received a half a unit of mothering. The social worker wrote her findings down in her notebook and went back to her lab.

Back at the lab, some clever data scientists then examined the effects of mothering on child outcomes. When their findings were reported in the popular press, they were derided as obvious---they found that kids who received more mothering did better in life. Apparently, age 0-4 was when mothering was most important. They computed, using the workatron, that each child produced an additional $10,000 per year when receiving an additional unit of mothering. 

One day, a new leader was chosen in the land of Anna and Bess, a leader who believed in the principle: You must earn to receive. The leader made a new rule--only Moms earning 10k in paid work were eligible for the 10k subsidy. Otherwise, Mom and baby would get nothing, starve, and die. This faraway land was very harsh in this way. 

Anna and Bess were scared about the new program. Clearly, they would have to find "real" jobs rather than doing their "fake" job of mothering. Neither had finished high school nor had any skills to speak of. They had no money for day care either. How could they earn $10k in paid work? What would they do to feed their families?

One night, they got together and, over a bottle of cheap wine, worked out a solution. Anna would be a full-time nanny for Bess's daughter and vice-versa. Each would be paid by the other $10k for the work. The money would, of course, come from the subsidy the other mother would receive for her paid work--taking care of the opposite baby. And so they did this for a year. They cleverly "gamed" the system, but their kids received half as much mothering.

But the government in this faraway land hated people who gamed the system and soon found out about their trick. They sent in a social worker to fix the problem.

The clever social worker came to each woman with a wonderful opportunity. Each could work for 12 hours a day cleaning toilets, while the other mom looked after both kids. Moreover, the job perfectly rotated so that when Anna was on duty Bess was off duty and vice-versa. The social worker, and the leader of this faraway place rejoiced. Since toilet cleaning paid each $11k, but they were no longer eligible for the 10k subsidy and thereby saved the state a considerable sum on entitlements. Better yet, Anna and Bess would discover the independence and freedom of true paid work. 

Naturally, Anna and Bess jumped at the chance as both were taught not to burden the state. At the end of the year, their children were less well developed, receiving only half as much mothering than before, but the local penitentiary, where they were working had nice, clean toilets.

Using the Workatron, the social worker determined that the value of clean toilets in the penitentiary was very worthwhile, amounting to a half a unit of mothering to a baby.

And so, my dear friends, we have arrived at a happy ending. Anna and Bess are no longer a burden to the state. Their children are undeniably worse off, society is undeniably worse off. But the state did not have to pay out and their kids, as they struggle through life, can have the happy knowledge that their rarely seen mothers burdened no one else.

The Moral of the Story: It is a choice on the part of society to say that it is better to give kids less mothering than to subsidize maternity leave during early childhood. It is a choice to say that we would prefer than moms send their kids to day care rather than pay for them to stay home and care for the kids themselves.

The parable is also about how arbitrary it is to define work by whether it is paid or not. We should measure the societal benefit of such work and, presumably, incentivize the work yielding the highest social benefit. If we think a new mom's time is better spent cleaning toilets than looking after her child, that is perfectly fine. But let us be open and honest about this judgment rather than saying that, because one activity produces pay and the other doesn't, of necessity the paid activity is more valuable. 

Economics, as well as game theory, says nothing of the sort.

Let me close with an extreme example to illustrate the point. In this faraway land, Charlotte is truly gifted. Were she subsidized by the government, Charlotte could produce world peace lasting forever through her volunteer work. Without a subsidy, the best that Charlotte can do is to spend that time cleaning toilets. It is not a well-paying job, but at least it pays something. 

As a society, we would have to be idiots not to give Charlotte the subsidy--despite the fact that world peace is not paid work while cleaning toilets is.

Clearly the right rule in this faraway land is that government spending should maximize societal benefit. Perhaps, as a rough rule of thumb, insisting on earning to receive benefits is good, but it mustn't be applied dogmatically, as it often is in our world, as well as the faraway land of my story.

The End.