Friday, September 6, 2013

Has the US safety net become a hammock?

The Economist thinks so:

..In 39 states, their hypothetical single mother would make more from benefits than a secretary does from work. In 11, she would make more than a first-year teacher. For many Americans, says Mr Tanner, not working is a “rational alternative” to working.

1 comment:

  1. I would like to point out that Mr. Tanner fails to mention major hidden but relevant costs when a single mother chooses to work. Here is a more complete list of costs that will be incurred by a single mother who chooses to work:
    1)Cost of daycare/nanny (This is a huge cost in US)
    2)Healthcare costs for the mother: A working mother literally has two jobs. So the recovery from the delivery and any other subsequent illness is longer. (Note: This cost could be easily estimated for the hospital costs)
    3) Healthcare costs for the baby: For example, a working mother is less likely to continue breastfeeding. Then when a mother chooses to work she is also most likely forgoing the benefits of breastfeeding for the baby. (This is harder to measure but it is a real cost because the doctors now unanimously agree that this is the best choice for a baby. I would be happy to know about any study that tries to estimate this).
    I am glad to say that when mothers make their choices most of them correctly take into consideration these hidden costs that economists fail to consider. Most of the time, it is these hidden costs that dominate their decision.
    When we take into these additional costs from working, "not working" is even more a rational alternative to "working".
    An economist and a mother