Unknown: Whether you choose to work outside of the home or not,
or whether both parents work outside the home versus one
parent not working outside the home is going to impact like,
almost every other choice you make, it just really changes
your opportunity set. It'll change your income, it changes,
you know, how your kids spend the time, the kinds of
activities you can engage in, just like it's incredibly
important for everything. And because of that, it is one of
the decisions that we really want to get right.
Imagine a family where there's two parents and each make
$50,000 a year. So before they have kids, after taxes, you're
bringing home about $85,000 total. The main thing you want
to think about here is what is your kid going to do if you're
if you're at work, so let's say childcare is $1,500 a month. If
both parents choose to work in this scenario, their kind of
take home all in after this child care expenses is about
$67,000. If one parent chooses to stay home, that drops their
income by about $46,000. But it also saves them about half of
that in child care costs. So if you were thinking you were going
into this thinking, you know, well, if one parent chooses not
to work that's $46,000 less. Actually, it's only about
$23,000 less, because you haven't factored in that child
care cost. That gets even more complicated if you add in, say a
more expensive childcare option, which could almost entirely eat
up the income of one of one of the individuals. It also gets
more complicated if one person is making more money than the
other.
There's a sort of short term balance between childcare
expenditures and other auxiliary expenditures that come with
working commuting, and so on, sort of weighing that against
the income. So I think there's a there's a reason when you're
thinking about this choice to actually sit down and write down
all those numbers and figure out, you know, how different is
the actual realized income in these two scenarios. It's going
to be smaller than the total income of the person because of
these other expenditures.
What I found in my research is that in fact, this decision
isn't very important for outcomes for kids. So if you
said, you know, kids, whose whose mom stay home, do better
on tests, we don't really see that. If you said like, are they
are they healthier? We don't really see that. In that sense,
like the the data piece of this just dials way down all of the
rhetoric because it says, there are many good choices. And the
last piece, which is I think that's always the hardest to
think about, but it's actually really important is to think
about how much the extra money matters to you in terms of not
dollars, but in in happiness points in what we call utility.
So let's say it's an extra, you know, $30,000 a year kind of all
in once you take everything into account. But what is that
$30,000 a year buying you? And how much do you care about the
thing that is buying you?
So when my daughter was born, I, you know, I actually never
really had much of a question about whether to return to work.
That was something that I had always planned, planned to do.
And so so I did that. And for people who who do return in
particular, it often becomes a little bit taboo to say things
like, like, I have a job or I work outside the home, because
that's what that's what I want to do. That we sometimes can
feel the pressure to say, well, I work because I have to and
sort of on the other side, you get the same kind of thing,
people are saying well I stay home because like that's the
only thing that makes that makes sense financially. And I think
both of those responses come out of the idea that somehow this is
a choice that must be defended. That it must be a choice that's
imposed on you, as opposed to a choice that reflects the
preferences that you have. And I wish that we were a little more
comfortable saying you know, I have a job because that's the
thing I want to do because I don't want to spend the whole
day with my kids every day or I stay at home because I really
liked to and the thing I want to do is be home so I can be there
with my kids and that's really what what I want to do