Forms of wealth and parent-offspring conflict

Abstract

As Trivers (1974) has emphasized, goals of parents and offspring are not completely congruent. Trivers discusses psychological mechanisms which the parties use to achieve their goals. In this paper, we argue that economic variables are also relevant in this conflict. Specifically, as forms of wealth change—as more wealth is held in the form of human capital rather than real or financial capital—the amount of control which parents have over offspring decreases, since parents are less able to use threats of disinheritance to control children and since educated children have large amounts of (human) capital independently of behaviors of parents. This change in parental control has two implications which we explore in detail. First, parents substitute time spent with children as a method of inculcating children with desired values; this implies lowered fertility as human capital increases. (This is in addition to the standard economic analysis of increasing costs of children as parents' education, and hence time costs, increase.) Second, parents cannot rely on children for old age support (a form of altruism) and therefore must substitute other forms of old age support, such as Social Security and pension funds. Finally, we argue that this paper is an example of interdisciplinary research between economics and biology and that type of research may be expected to be useful.