Susan Mayer on What Money Can't Buy
Nov 25 2019

What-Money-Cant-Buy.jpg Sociologist Susan Mayer of the University of Chicago talks about her book What Money Can't Buy with EconTalk host Russ Roberts. Mayer reports on her research which found that giving poor parents money had little measured effect on improving the lives of their children. She emphasizes the importance of accurately understanding the challenges facing children in poverty if the goal is to actually help them. She concludes that there is no simple way to help the most vulnerable children and that strategies to help them must recognize this reality. The conversation ends with a discussion of the potential role of education and parenting practices to help children in poor families.

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Explore audio transcript, further reading that will help you delve deeper into this week’s episode, and vigorous conversations in the form of our comments section below.


Daniel A. Waschbusch
Nov 25 2019 at 8:29am

Really good episode.

I’m surprised child effects didn’t come up. There is now considerable evidence that child behaviors influence parenting behaviors as strong or more strongly than parenting behaviors influence child behaviors (e.g., Burke, Pardini & Loeber, 2008, Journal of Abnormal Child Psychology).

Brent Orrell
Nov 25 2019 at 10:19am

Very interesting and helpful episodes. I wanted to respond to one issue on the relationship between”parental motivation” and school outcomes. David Deming at Harvard did a sibling study on the Head Start program that showed that there were more positive outcomes for children in those families who went to Head Start programs than in their siblings that did not. Since it is unlikely that parents, across the whole sample, treat their children significantly differently, it’s arguable these effects are related to Head Start participation rather than parental motivation.

A more recent analysis of later cohorts of Head Start kids did not show the same positive results. Deming believes this may be because the “floor” has risen as a result of improved educational levels among low-income women.  An article with links to both studies is available at this link:

Nov 25 2019 at 1:03pm


I thought this was one of your best episodes ever. Susan seemed to be one step ahead of you (and the listener!) at every turn, responding to every skepticism of yours like “you couldn’t possibly measure that” to “yes, and I did.” I think the skepticism was healthy and her response conducive to optimism in our ability to learn what we used to think would be impossible to know.

Yet there were several points in the episode which troubled me, in a “the dog that didn’t bark” kind of way. There seem to be several assumptions which you, who I generally applaud for questioning the assumptions of the “popular wisdom,” fail to notice you are even making. The first, and most personally important to me, regards things ‘everyone knows’ are good for their kid, such as reading.

Allow me to begin with a disclaimer. I am a college student with a child of 8 months with a partner who was not, at the time the child was conceived, a college student, although my significant other (we are not married) is now taking classes. I’m 100% certain that according to current statistics, I am counted as “poor:” I receive the maximum allowance of food stamps, have the maximum quantity of financial aid, and (for what it’s worth) smoke cigarettes occasionally. Yet I believe I have a roughly 50% chance of being employed (at least as an intern) by a renowned financial institution in the next year, and attend an elite academic institution. It is difficult to place people in boxes.

My child is currently 8 months of aid and I understand that reading is perceived as a positive influence in my child’s prospects. Yet I find it distinctly unrewarding to read ‘to’ my child. Although I try to read my homework aloud with my child in the room, I doubt any would consider this reading ‘to’ my child, and I also try to speak aloud to my child as much as possible. I’ve tried reading my child children’s books, but I find that he does not look at them at all (even if they are picture books), which I take to mean the fact that I am reading, as opposed to speaking in grammatically correct sentences, is immaterial.

Perhaps my child is too young for it to matter, yet according to my knowledge of studies, parental reading is correlated with success, even for infants. Is somehow reading printed material influencing the child’s brain circuitry even without the child seeing book at all? Allow me to propose an alternative explanation.

There are two kinds of entertainment: Involved, and uninvolved. Involved entertainment requires significant mental investment from those being entertained, while uninvolved entertainment does not. Thus, while television can be uninvolved – it continues to play even if the viewer is not paying close attention – reading must be involved – the mental effort required to simply parse words on a page requires one to pay significant attention. A remark: Television can still be involved entertainment, if one chooses to invest significant attention. It simply does not require viewers to do so, and therefore attracts a disproportionate amount of viewers who do not. Viewing involved as opposed to uninvolved forms of entertainment are correlated with success, and causation goes in both ways. I recently read bowling alone; although it does not explicitly mention this distinction, the evidence presented in the book led me to form this opinion.

Now back to children. Children who engage in involved forms of entertainment and children who engage in uninvolved forms of entertainment have wildly different prospects. Moreover, children who have parents who enjoy involved forms of entertainment are more likely to prefer that form of entertainment themselves, whether for genetic or environmental reasons. Adults, as your discussion with Susan suggested, don’t remember very well how much their parents actually read to them. Hence, doing what they remember enjoying as a kid (as well as what they enjoy now) they read books to their kids. Et voila, kids whose parents who read to them enjoy greater success than those who don’t, with parental reading causing nothing in particular.

I’m aware that this non-causal explanation is just a theory, but I’d like your explanation of any causal theory. Just how can reading a book a child does not even look at improve his brain’s development more than exposing the child to grammatically correct speech from any other source? Sure, older children might look at the page and actually try to parse the words, but reading at those ages doesn’t seem to be any more correlated with success than reading to infants. And if it is just correct speech that influences children’s mental capacity, why is it that television viewing, another way of being exposed to language, tends to be correlated with lower levels of academic achievement?

I’d be interested to know your answers to these questions. And into what category does my allegedly deprived child fall?

Best regards,


Nov 25 2019 at 2:27pm

I applaud the guest for trying. She is trying to find a silver bullet across all poverty groups. I just don’t believe one exists.


My mother is a practicing physician at a county hospital that largely serves the poor and has been there almost 30 years. Growing up, she would share some details about her patients family structures. Many many many times over she would remark how certain ethnic groups behaved so differently than others despite both being classified as “poor”. This included who showed up on time to the appointment, who followed her directions, what was being served for dinner, how the children were doing in school, which kids ended up later having teenage pregnancies/ending up in jail. Pretending all of these groups are a homogenous blob even when they are living in largely the same area is a mistake.

Now take it to the national level.  the inner city poor of San Francisco have very little in common with the rural family  in Ohio. Heck, no two poor person even in SF are the same. Some are legitimately struggling afford rents, others are struggling with drug addiction.  Trying to aim nation wide policies to solve very individualistic problem is a mistake.

Nov 25 2019 at 4:14pm

Great point that low-income people may have very different situations, and one proposal would not address all those problems.

I would not agree that the guest, Ms. Mayer, is looking for a silver bullet.

She acknowledges that earlier in her career she thought cash transfers (and other approaches) were a silver bullet, but now believes they are not, and that the situation is more complex.

“I thought it was neighborhood effects; and that turned out maybe not to be the silver bullet. Then I thought it was income and that turned out not to be the silver bullet. And I’m thinking, you know, well then I thought inequality is just, you know, it’s relative income not absolutely income. Well, that turned out not to be the silver bullet.”

“I think what people don’t understand is that if you want to help poor children, you have to really know what help they need. You can’t just think you have the solution–that would be money. You have to really have the solution, which might be something else.”

[quotation marks added for clarity per commenter—Econlib Ed.]

Nov 26 2019 at 10:18am

The last two paragraphs above are quotes from Ms. Mayer taken from the transcript.

Nov 26 2019 at 11:22am

I guess maybe I misinterpreted her statements. I interpreted it as she kept looking for the silver bullet and kept arriving at, its more complicated.


But take her example of nudging. If we move the backpack to the front door. If we set reminders to read to your kids. All of these micro nudging are in effect fit all strategies. In a way, to bring this back to econ, she’s trying to find some micro founded variables that don’t change via circumstances.


Maybe that’s true and I’m just being way too much of a pessimist. But even then, I don’t buy that cause and effect stops there. “Ah ha, the parents are just too forgetful about school absenteeism and they need reminders to fix it”. I suspect something even deeper is going on there.



E Easter
Nov 25 2019 at 11:40pm

This episode echoes what I’ve seen and experienced in my life.  SO MUCH TRUTH TELLING IN THIS EPISODE!  I was born into poverty, grew into the middle class and now find myself upper middle class as an adult.  I’ve seen it all!

From birth through middle school, I was very poor.  I lived in an apartment complex, received free lunch and food stamps.  As a blonde girl, I was a minority in my neighborhood, but I thought that was normal.  My parents came from large, very poor European immigrant families.  My dad worked as an apprentice during the day (he had just been discharged from the Navy) and went to trade school at night.  My parents read books to us every night, helped us with our homework, made us go to the library and summer school (even if we didn’t need it), we attended city-funded sports leagues, subsidized Sunday School and Bible Camps, and my mom volunteered as a class helper at school.  My dad would take us and our friends fishing or roller skating (free stuff) on weekends.  They made us dinner every night, even if was just beans & rice.  My mom knew how to stretch our limited dollars by going to the ghetto grocery full of nearly expired canned & frozen goods.  Eating out was a rare treat.  After school my mom would teach English to our Vietnamese “boat people” friends, which taught us empathy and how to teach something to someone.

None of these things were going on in my friends’ homes. Period.  Not a single one of my elementary school friends’ parents even made much effort to get their kids to school, let alone read books to them or take them to the library. There was no asking about homework. They just played outside and watched TV in the evenings.  Out of the 30ish childhood friends with whom I remain in contact, only one went to college (my best friend) but she went later in life and I’m pretty sure that was the result of my family’s influence on her. 🙂

As I entered high school, my dad was making more money and we moved to a rented house in a middle class area and I made friends with the kids in the Gifted Program at our low-performing, low-income school.  We were in all the same classes year after year (there were only 17 of us in a class of 400).  Not surprisingly, the other kids in the gifted program had involved parents like mine.  The level of income (we were all poor to lower middle class) and race (the group was multi-ethnic) did not matter.  The two biggest factors were interested parents and two-parent families.

Now obviously, this formula won’t save everyone, but I’m sure the correlation is huge.  My sister got pregnant at age 16 and never graduated from high school, while I put myself through college, married an attorney and had kids when we could afford them.  Very different outcomes from the same household.  (She’s doing fine now despite the rough start.)

However, the folly of thinking you can affect life outcomes through better teachers or just giving people money is short-sighted, as the guest explained.  Poor performing schools are full of great teachers and they seek out the students who want to learn and they provide extra help.  So much money is already wasted on unnecessary administration at public schools that could and should be spent on teacher development.  In any case, the quality of the teacher doesn’t matter if the students don’t show up regularly, they don’t do the work and they don’t respect authority. It’s the elephant in the room no one wants to talk about. Why???

Don’t we want the situation to improve?  Haven’t we spent billions on welfare programs since the New Deal with no appreciable change in the percentage of those living in poverty?  No, dumping money on the problem alone will not fix this.  While my parents would spend extra money on day trips or books, my childhood friends’ families would spend extra money on vane luxuries like tennis shoes and eating out.  It’s not PC to say, and it’s not true in all cases, but it’s the truth in too many cases.

If anyone wants to know why we have such different outcomes in poor vs successful families, observe the differences between what the families do at home in the mornings, afternoons, evenings and weekends. You will see a vast chasm.  Closing the chasm should be our focus, and luckily it’s not expensive as the guest also noted.  It only takes Community Leaders to find the intestinal fortitude to start talking about it and providing incentives for parents to do more of the right things.  Sadly, I do not see this happening, as our Leaders would rather point fingers and say rich people or racists are the reason the poor are poor.  They prioritize votes or power acquired via placating those who need help rather than actually help.  It’s a subterfuge.

The truth is anyone from any race or socioeconomic status can maximize their potential in this country by focusing on good parenting and education.  That’s good news!  That’s not the message being delivered to the masses and that’s why this won’t change.

Greg Wilson
Nov 26 2019 at 12:19pm

Everything E Easter says is correct.  I have been mentoring a poor inner-city young man for six years.  We get together every Saturday.  I am 62, he is 16, but he calls me every Saturday morning to confirm I am coming because I show greater interest in him that his parents.  They love him, but commit no energy to his development or well-being.  Both parents are alcoholic and neither were employed until his mother recently got a night job cleaning.  He has 10 brothers and sisters, all the older ones smoke pot frequently and only a few have minimum wage food service positions.

My mentee expresses a desire not to become his parents.  We work on a Lego robot most weekends.  He is now enrolled him in the ‘trades program’ through his public school program with the hope that he can become an HVAC technician post-high school.

I felt called into this program and continue out of genuine care and concern for this young man.  I hope this does not sound like self-praise, because I deserve none.  My only point of this post was to support what E Easter was stating.  The key to changing outcomes is an adult that is invests time and talents in the life of a child, and models behavior consistent with successful outcomes to produce the same in the child.

Money spent for programs that train parents, support mentoring, etc is money well-spent.  Money, beyond basic needs support, given directly to the family will only produce more of the undesired behaviors that we are trying to prevent.

E Easter’s accomplishments should be applauded and hopefully her example Mayer’s work can impact future policy.

Marilyne Tolle
Nov 26 2019 at 6:15pm

Thank E. Easter for sharing your experience.

One argument I’ve heard about why “the poor” remain poor is that they don’t have the “mental bandwidth” to deal with anything other than the scarce resource (money in that case). They’re so focused on making ends meet and paying bills on time that their attention is entirely captured by (the lack of) money. As a result, they don’t have any “bandwidth” left for, say, impulse control and planning (or reading to their children).

If that were the case, then simply giving people more money would solve the problem. But in practice it doesn’t seem to, which suggests that family rules and norms, which underpin attitudes and behaviours, are more important.

What do you make of this?

Doug Iliff, MD
Nov 26 2019 at 10:27pm

This is a great story, and it fits well with what I have to add, from the perspective of one who started a highly successful, non-elite, middle-income private school— and married a master teacher who taught there, and later in both a wealthy district and an inner-city school.

1. The problem is culture, not income.  Poor families down through American history, right up to the present children of boat people, have dedicated themselves to the education of their children.  Those children will almost always rise.  The corollary to this is that money won’t change culture, and we don’t know what will.  Russ mentions the cultural change regarding smoking, but this is an outlier, because it relied on Shaming; and Shaming is a cultural taboo.

2. I have many teachers in my family practice of 33 years, and I see a growing despair.  They are good people, and they care, and they try hard.  Their classrooms have become war zones for several reasons:

2a. Progressive reinterpretation of the Americans With Disabilities Act has produced an aggressive mainstreaming.  In  middle class schools, this is a major disruption; in lower class schools, it absolutely prevents the majority of teachable children from receiving usable instruction.

2b. A cultural erosion of parenting skills and sensibility now means that anything a child reports is right, and the teacher is wrong.  This is an annoyance in middle class schools, and a disaster among the poor.

2c. Russ is right, and Susan is wrong, about the effects of parental innovation.  At my wife’s inner city school they have twisted themselves in knots trying to get parents to read with kids 20 minutes a day, with zero success.  Susan’s effects will last a few months past the experimental innovation, as will my efforts at behavioral modification of the obese.

2d. The educational-industrial complex promotes a new theory of discipline, reading, and math instruction every couple of years.  The “successful” models are produced in university towns with enthusiastic graduate students, and reproduced in summer seminars to teachers who have seen all of this before, and are appropriately cynical.

2e. The perennial wars over “look-say” vs. phonics instruction, and New Math vs. Old Math, have now see-sawed for decades.  Phonics and Old Math work, but the educational establishment is drawn to the weird and esoteric like moths to flames.  I’ve tried to understand New Math.  It’s incomprehensible.

2f.  Single parent families have a hard time parenting.

2g.  “Tracking” students is an effective way of separating the motivated from the unmotivated.  It is currently an educational anathema.

2h.  Administrators are professionals who simply glance off the classroom on their way to advanced degrees and higher pay.  They don’t love teaching, and they don’t understand the challenges of their teachers.

3.  Russ’s instincts are basically correct, although there is no politically practice way to make parents have skin in the game.  Vouchers and charter schools, to the extent they are successful, recruit parents who are relatively more involved, even if it is only to the extent of filling out an application.  Bad parents can’t get out of bed.  Therefore, these schools will have relatively fewer disruptive students to make education difficult for their cohorts.



Nov 26 2019 at 12:34am

Well done discussion. I just wish that Russ would have pushed on some of the points of discussion. They are:

1. A dollar is a dollar is a dollar. Cash from, alimony welfare, or UI is not equal in my opinion. All income sources have narratives attached to why the individual is receiving the money.  People are social beings. If we’re comparing social factors like number of words read or lifestyle choices against income, where the money comes from would have a major factor of importance.  I know Russ feels guilty for benefiting from an oversubsidized education system. A single parent would probably feel guilt, or inadequacy for having a broken family.

2. Household composition. Obviously, two parent households have different dynamics than single parents. Statistics often remind us that children of single parent households are much less likely to be successful in life. It would make sense, to try to understand how income in modern society causes divorces. Money is often cited as a reason for divorce. It’s probably also a reason for marriage, which bears reminder.

3. Parent time spent with children has an opportunity cost.  This is obvious, but a discounted fact. Modernity, and the ‘information economy’ means that parents must sometimes choose between reading to their children, studying for a test, or doing work at home, or around the house. A parent that talks in the workplace all day may not feel like talking to children as much when they get home.

I like the idea of privatizing schools, as Russ suggested. But to do that, you would need government to pay for it for low income families you are trying to help. So, you either need to pay parents to pay for schools, or provide vouchers. Of which I prefer the former, so that we don’t accidentally oversubsidize a failing industry without societies consent.

John P.
Nov 26 2019 at 9:21am

In addition to the topics you’ve mentioned, I would have been very interested in hearing Prof. Mayer’s thoughts on the explanatory power of variations in cognitive-ability levels (I.Q., if you will) and their stickiness.  Judging from the index to her book (viewable online; thank you, Amazon!), this is a topic she touches on there.

Jeff Z.
Nov 26 2019 at 8:52am

Interesting conversation, but no mention of IQ. There is a strong correlation – with over 100 years of evidence to back it up – between IQ and success in the various domains of life: income, education, successful marriage, etc..

I suspect it’s an uncomfortable area to enter, so most fear to tread.


Russ Roberts
Nov 26 2019 at 10:11am

The IQ literature may be a little more complicated than it appears at first glance. At least Nassim Nicholas Taleb thinks so.

Jeff Z.
Nov 26 2019 at 2:13pm

Russ, please consider Richard Haier, author of The Neuroscience of Intelligence as a future guest speaker. Apologies if he’s already appeared and I missed it.

Marilyne Tolle
Nov 26 2019 at 6:01pm

An interesting and I think important distinction is that between intelligence (IQ) and critical thinking.

IQ (Intelligence Quotient) measures ability at visuospatial puzzles, pattern recognition, math problems and vocabulary questions, which are no doubt highly correlated with success at school, and by transitivity success at getting a job.

Critical thinking encompasses verbal reasoning, argument analysis, hypothesis testing, probability and uncertainty, which all help with real-world decision-making and problem-solving.

People usually conflate the two but they are distinct, which explains why “smart” (high IQ) people can make “dumb” decisions.

Now of course, the correlation between the two is not zero, and it’s not negative.

The way I would put it is that (an average) IQ is a prerequisite for developing critical thinking but it certainly does not imply it.

Perhaps we should take comfort from the fact that critical thinking can be improved with training and practice.

As Edward de Bono says:

“Intelligence is something we are born with. Thinking is a skill that must be learned.”

Nov 26 2019 at 11:26am

I personally have a hard time taking IQ seriously. A good acid test, I asked my engineer friend if his kids were going to be good at math. He seemed convinced they would be. Then I asked if someone swapped out his child for another at birth(assuming no health defects) and he never knew it, would that child show any difference in math skills?


IQ seems like its correlated with a lot of the same things as life outcomes. Sure, may at the very fringes IQ matters(not everyone grows up to be Einstein just as not every basketball player becomes Michael Jordan), but still.

John P.
Nov 26 2019 at 12:59pm

Ajit — If you’re interested, an excellent overview of the literature (as of 2010) is Human Intelligence, by Earl Hunt (published by Cambridge U.):


Steve B.
Nov 26 2019 at 1:09pm

I am convinced from reading and life experience in management and parenting, coaching that the IQ correlation is significant, and that in turn is largely genetic.

The second parameter is self discipline for delayed gratification, also influenced by genetics, but this is where parenting has its greatest influence. The “Don’t Eat the Marshmallow” effect. Self discipline evolves from outside discipline (parenting) at a young age.

Nov 27 2019 at 12:06am

The biggest problem with education is that folks who value it do not understand folks who do not value it. They think everyone should think like themselves and can’t fathom why some don’t.

Just think of something that you don’t value, but others do. How do you treat it?

I don’t value Taylor Swift, for instance. I treat her music exactly like someone who doesn’t value education treats education, except I’m not made to sit through her concert.

I’m currently reading Rory Sutherland’s book. He spends a good deal of time in it on stated vs. revealed preferences. Of course, when Mayer asks people if they should read to their kids, they say they should. That’s a stated preference.

The revealed preference is far more important.

If you want everyone to value education, you either need to convince them that it’s worth something or change it so that it’s worth something to them.

Nov 27 2019 at 8:35am

Great episode this week. It’s nice to hear a researcher discuss what she changed her mind about, why she changed her mind, and what the limitations to the methods she used are. I wish Russ could have provided the same level of scrutiny to McAfee when he was on. Comments are closed on that post, but I thought this article would be relevant for those who thought McAfee’s sole use of US data (excluding any kind of imports) is a huge blind spot:

Skip Franklin
Nov 27 2019 at 12:25pm

I want to comment on one particular bit of this episode, when Russ was talking about parents not valuing public schools because they don’t have to pay for them. I don’t think this is correct at all. Parents may not pay tuition, but every school asks parents to invest both economically (supplies, events, activities) and in terms of time. Parents who want to be involved do have skin in the game, even in a “free” school. Of course, some parents just don’t want to be involved or don’t have the resources, but that isn’t because they don’t have to pay for the school.

Marilyne Tolle
Nov 27 2019 at 7:05pm

Around the 30-minute mark, Russ says:

“So, we look at the things that we can measure and we also look at the things that are easy to solve, and measurability is an obvious reason for that, is part of that. But here the challenge is, is that if it’s not money, it raises a very unpleasant thought, which is: Well then what is it? And people don’t want to think about that, partly because it’s not easy to fix.”

Another reason why people don’t pose certain questions is that they might not like the solution. It’s what social psychologists call “solution aversion” (see Solution Aversion: On the Relation Between Ideology and Motivated Disbelief (2014) by Campbell and Kay).

People formulate the questions that support the solutions they favour and simply don’t ask the questions whose solutions jar with their worldview.

It strikes me that people who favour money transfers like to ask questions that require top-down intervention like redistribution, but omit other questions.

Casey Vanderbeek
Nov 27 2019 at 10:39pm

Many years ago I read Oscar Lewis’ book “The Culture of Poverty”

I couldn’t help thinking of this book while listening to Susan.

One theme discussed in the book is that long term exposure to poverty drives a cultural response.   There are a set of logical responses to poverty that might make little sense to someone not exposed to poverty.  When multiple generations are exposed to poverty those behaviors are passed down.  Even when the conditions of poverty are removed it can take a generation or more for the cultural responses to poverty to disappear.

I wonder if this might be in part responsible for the lack of immediate correlation between income and the familial behaviors that drive academic performance.

Nick Ronalds
Nov 28 2019 at 6:29pm

Excellent podcast and terrific guest. She comes across as simultaneously meticulous in her thinking yet modest in her claims. The fact that her decades-long investigations have taught her that much about these questions is uncertain or ambiguous just adds to her credibility. Wasn’t Socrates supposed to have said “the more you know, the more you know you don’t know”? However much we might like to solve the problem of poverty, we do ourselves no favors by deluding ourselves into believing there’s a silver bullet when there is none, or advocating a solution that isn’t one.

V Xue
Nov 30 2019 at 11:32pm

Most of the current understanding of and solutions to poverty are ideology-driven (and many of them are obviously false). Hopefully evidence-based, ideology-agnostic approaches would play a bigger role in policy-making.

We have been fighting poverty for 40+ years and we haven’t solved it. This tells me it’s extremely hard to solve this problem.

With AI though, hopefully we could gather enough data to come up with solutions tailored to individual cities, neighborhoods, blocks, or even individual households.

Lori Miller
Dec 4 2019 at 1:48pm

I laughed out loud when Susan said, “If you dropped money from the sky in this neighborhood, would the children end up better off?” I used to live two doors down from a Section 8 duplex and now live close enough to bad neighborhoods to see the posts on Nextdoor. Constant yelling and screaming from the Section 8 place. Cases of beer bottles in the alley on trash day. Kids allowed to play in the street at 11 PM. Here–constant posts about lost and found pit bulls. Satellite dishes on even the most dilapidated houses. Sewer grates so full of trash and dirt that they don’t drain. Cars on the street with flat tires. LOL, they’re not going to take the kids to the museum or the state park. I don’t know how you get people to care.

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TimePodcast Episode Highlights

Intro. [Recording date: October 11, 2019.]

Russ Roberts: Today is October 11th, 2019, and my guest is sociologist and author, Susan Mayer, Professor Emeritus at the University of Chicago's Harris School of Public Policy and the College. Her research and writing look at a broad set of issues related to poverty and education. Our topic for today is her 1997 book, What Money Can't Buy: Family Income and Children's Life Chances. Susan, welcome to EconTalk.

Susan Mayer: Oh, thank you.


Russ Roberts: This is a very provocative and careful empirical exploration of a set of incredibly important issues that we all would like to understand better, particularly for policy-making. It gets at the heart of what causes poverty, how best to help children who grew up in poor households. Let's start with a question at the center of the book: Does giving parents money help their children?

Susan Mayer: Well, even today it's not a simple answer. Giving the very, very, poorest, most deprived, parents money to feed their children and provide basic material well-being can help their children. But, in general, simple transfers of money is probably not the most effective way to solve the problems that we associate with growing up in poor families.

Russ Roberts: What are the different ways that policymakers, economists, sociologists and others, think about just the intellectual issue here at the heart of the challenge? Which is, really, whether poverty is causing other things? Whether other things are causing poverty? What are some of the challenges there in the different ways that people have thought about it over time?

Susan Mayer: Well, I think historically people have talked about poverty as though income itself were the problem that was to be solved. And, then the solution would be just transferring money. That would be the simple solution: You could always just get rid of poverty in one fell swoop by transferring more money. But people didn't want to do that because of the potential disincentive effects or the possibility that transferring money to adults would reduce their inclination to work and to marry and to do the things that we expect of people.

So, yeah, this problem of poor children who fare worse on literally every possible measure of well-being that you could imagine including their future earnings and education, which is costly for society in many ways, but you don't want to help their parents because you think that might make them more lazy and irresponsible. So people have gone back and forth about how to solve this problem of poor children.

The easiest and most effective way would be, again, just to transfer money. Many people, on, from Liberals to Conservatives, have suggested things like a negative income tax or a guaranteed minimum incomes, things like that. But we haven't been willing to do that. So that raises the question: Well, how much is it really money that results in these bad outcomes of children? Or, is it something else that could be solved without transferring money? And so that was the key issue I was trying to look at in this book. And it turns out to be a really hard question to answer. Which explains why it hadn't been answered adequately before I wrote that book. And it's still controversial 20 years after I've written that book.


Russ Roberts: Talk about the two theories that you outlined in the book, the investment theory and the good parent theory, for how parents affect their children's lives.

Susan Mayer: Yeah. So, I think economists and psychologists and sociologists and almost everybody, have a theory about how income affects kids' outcomes. So, among economists, it generally sort of follows from Becker's work--the idea that rich parents have money to invest in the things that children need to succeed; they make that investment, and they get a return on that investment in a higher well-being of their children. I think other disciplines emphasize either the idea that money hurts parents' ability to be a good parent by making them more depressed, more inclined to not want to do the things that help children succeed.

And then there's the--a separate point of view--that is, that the structure in which poor people live hurts their children.

So, this is the idea that living in a bad neighborhood hurts children's life chances. Being in a school with low-income peers hurts children's chances for growing up successfully partly because schools in bad neighborhoods may have worse teachers, may be more crowded. But there's this sort of structural argument, there's the behavioral argument, and there's the investment argument. And all of those imply that money itself can purchase better well-being for children.


Russ Roberts: I just want to say that--one of the things I worry a lot about recently is the focus on money. Of course, when you're poor, you should focus on money. But the idea that the problem is that poor children don't have enough money--it is, to me, one of the things I worry about is that since we can measure money somewhat imperfectly, but we can actually at least measure in theory how much people earn and how much they spend on their children, even; and we can't measure the other things often that we care about, which is a lot of what your book is about--we end up focusing on the money.

And we have a natural inclination to assume that money is the source of the problem. The famous--it's attributed, I think correctly in this case, to Ernest Hemingway and F. Scott Fitzgerald. I think Fitzgerald says, 'The rich are different from us,' and Hemingway says, 'Yes, they have more money.' And of course that's a true statement. But the other part of it is: What else is going on there? And, it's hard to look at the other things. We don't want to look at some of those other things that might be going on beside money. And we're drawn to money as a solution because we can measure it. Do you think that's a problem that economists have failed on?

Susan Mayer: I think it's not only a problem economists have failed on, but I think sort of in general, American society is based on the idea that more money means you're a better person. And so we way overemphasize the role of money in practically everything.

I think the idea that a poor parent can't be a good parent is, well, first of all, it's sort of insulting and reprehensible to low-income parents. And second of all, it's certainly not true.

For one thing, most people who are poor aren't poor for very long. And they manage to be perfectly good parents through periods of low-income. And so we know that some low-income parents can be very good parents and we know that some high-income parents can be really bad parents.

And I agree that we latch onto money partly because of, sort of, the hypercapitalism that we live in, but also because it is measurable. I mean, we focus very much on poverty--you know, some sort of arbitrary, more or less arbitrary, cut point in the income distribution--as an indicator of a lot of problems and a lot of behaviors that just don't actually exist at that point.


Russ Roberts: So when you wrote your book, a certain set of techniquesagain, this is the late 1990s or the mid 1990s when you were doing the research--when you wrote your book, there was a certain standard way of trying to assess parent's chances, parent's situation on children's chances, and children's outcomes. So talk about the empirical techniques that were being used there; and then if anything, was there a consensus at that time of what income might do to help children? Giving parents more income?

Susan Mayer: Yeah, I mean I think that the standard way people looked at the effect of income was to regress some outcome on income and a bunch of control things. Sometimes it wasn't actually even income. People looked at things like socio-economic standing, which, I don't know, doesn't really tell you much of anything, or being below the poverty line. And they just did sort of the standard kind of OLS [Ordinary Least Squares] regressions--

Russ Roberts: OLS, meaning Ordinary Least Squares.

Susan Mayer: Right. Sorry.

Russ Roberts: These are statistical techniques that try to isolate the effect of one variable on the thing we care about by holding constant a bunch of other things that we have in our data.

Susan Mayer: Yeah, exactly. And so this goes back to, it holds constant the things that we've measured in our data, not necessarily the things that actually matter. So, this is sort of inadequate for isolating the effect of income because a parent's income is correlated with a whole bunch of other characteristics that might also influence children's outcomes. And, it's essentially impossible to control all those possible things. We're not even sure what that list of possible things is. So we needed to take a completely new approach to isolating that effect.

Russ Roberts: But in that original set of research that was pretty extensive at that point, we had some understanding--and you're going to argue it was not correct completely--we had some understanding. And, what was that understanding? How would you describe the consensus, to the extent there was one, in the early 90s?

Susan Mayer: I think the consensus was that income, that is literally dollars, had a big effect. So the mental experiment here is, what if a plane flew over a neighborhood and just dropped money down? Now, how much would the lives of the children in that neighborhood change? So I think the consensus at that point in time was that it would change a lot--or at least that was the consensus in academic circles, maybe not in policy circles.

So, if that's the case, then the solution to the problem of poor kids is really, really simple, right? We can erase all these ill effects of poverty by simply transferring money. And maybe it sounds like transferring money is a big deal and difficult, but honestly it's one of the easiest and most efficient things that governments can do.

So, if the problem was money, the solution was pretty easy and pretty cheap, at least compared to all the other things we think as solutions, improving schools, improving neighborhoods, those kinds of things. So--

Russ Roberts: And in that view, though, it's just a question of political will. We just, either because of attitudes of Americans toward these, 'The moral Americans often judge poor people as inadequate and it would just be immoral and wrong to give them money. But if we could just give'--based on the research at that point, the argument of people who held this view was that, 'We just need to convince people that this will make the world a better place. We just need to show them the research.'

Susan Mayer: Yeah. I mean, there was always the fear that it could improve kids' outcomes, but it might make parents worse. So, it might lead to more unemployment, more single parenthood, and so on. But the research even at that time suggested that those disincentives were likely to be relatively small.

So I started out writing this book because I thought, I was pretty naive--lo, those many years ago!--that a really good policy solution, again, one that had been suggested by many economists, both liberal and conservative, was just this transfer of money.

It turns out that that just wasn't right. That argument is just not correct. Solving the problems associated with poor children is a lot more complicated than just transferring money.


Russ Roberts: And how did you go about trying to--before I ask you that, actually, let me ask you a different question. You said you were naive. When you started this book, what was your goal? When you started the research for the book?

Susan Mayer: Well, so--it's somewhat embarrassing even to say it--but I really thought that you could really boost this argument about a negative income tax or a minimum income by evidence that you could really improve the lives of children if all you did was transfer money. Because again, transferring money is cheap and simple compared to other ways you might approach this problem.

And so I really, really did think that that's what I was doing. And, I was just playing wrong. I mean, I can't think of another--well, I'm often wrong in my research. That is, I often think I'm going to find x and really I find y, which makes research exciting. But in this case I was way off base.

Russ Roberts: Which is--and by the way, there's a third solution--you mention negative income tax or some kind of universal basic income. There's also just increasing the generosity of existing programs, food stamps, etc.: making their requirements for getting those funds to be, make them easier, make them more available, and so on.

And many people have made those arguments and they seem reasonable. If parents have more money, certainly they afford--they are going to be, are going to be, as you said, psychologically more comfortable, relaxed, more secure, they can spend more time with their children; they might not have to work as much, they could spend more money on their children; they could give their children all kinds of things they otherwise couldn't have. Basic nutrition--a lot of people have argued that children suffer from nutrition inadequacy that makes it harder for them to learn, poor children.

And so it really seems like a pretty straightforward thing. And I just want to say I totally agree with you that, one of the things the government does best is transfer money. It's relatively efficient at it. It's pretty good. Now, there are costs of potentially lost work and disincentives that you mentioned. But, as you say at the time, and I think it's still somewhat true: it's not clear how large those disincentives are. So this seems like a good idea.

But your work did not confirm your worldview that you went in with.

So, what did you do differently than the standard techniques and what did you find?

Susan Mayer: So, I want to make a couple of things clear and then I'll answer this specific question. So, it's impossible to estimate the effective income. These are estimates of the effect of additional income, conditional on what families already get. So, any research that I have done doesn't show that reducing income won't hurt people. It's sort of, once basic material needs are met--which is the case for almost all American families with children--then additional income doesn't make a big difference. Or, at least in this evidence and I think in most of the evidence that's come since then.

So, what I did was use several different techniques to try and isolate the effect of income, and I used I think four or five different ways of approaching this problem because none of them were perfect, for sure, none of them were perfect.

I'll just give you a couple of examples.

One example of what I did was to look at money or look at the effect of income, before an outcome happens and after an outcome happens. The rationale here was: Well, if it's really income that matters, then income, before--let's say a child's reading scores are measured or before a teenager gets pregnant--well, that should matter. That's the theory. But income after those events shouldn't be able to affect something that happened before that income was measured. So income--

Russ Roberts: You mean before that outcome happened.

Susan Mayer: Before. I'm sorry, before that outcome was measured. Yeah.

So the idea is that income after an outcome is measured, is picking up relatively stable characteristics of the parents. And so you would only expect income after an outcome occurred to appear to affect that outcome if those stable characteristics were really the thing.

I mean, it's actually more complicated than this to make the estimate. But that's the rationale for that particular model.

And it turned out that, indeed, income after the events that I measured, which were things like dropping out of high school, teenage childbearing, kids' test scores, kids' behavioral problems, young adults' earnings, educational attainment--I'm probably forgetting a couple of them. But, at any rate, it turned out that income after those events had--appeared to have--a substantial effect on those outcomes. Meaning, that the stable parental characteristics were likely to be--were likely to bias the estimates of--

Russ Roberts: They were the underlying cause and not the fact. So again, I think it's useful to think about two groups of parents: one with slightly higher income and one was slightly lower income.

What you're saying is that the higher income parents, their children had better results. But, that higher income only came after those results had already happened. So that's an illusion. That's a statistical artifact because you can't control for the underlying differences that lead some parents to make more money than others. Is that a good summary?

Susan Mayer: Yeah, I think that's a good summary. I usually compare two families--their average income, over their kid's childhood, is the same. But, in one family, income is high before an outcome and low after, and the other it's the other way around.

Russ Roberts: Well said.

Susan Mayer: You only expect the income before that outcome to be able to effect that outcome. Right? So if it turns out that the income after the outcome has an effect, it's because of something other than the actual things that the family could purchase.

Russ Roberts: Although, of course, there is the possibility if the family could foresee that the income would be higher--and that's issue[?], recognize[?] it. I want to just say again, I think what I love about your book is that you're extremely careful to make these kind of caveats and not just say, 'And therefore we know--blank.'

Susan Mayer: Right, right. I mean, people do smooth income, there's no doubt about it, and that would be a source of bias in these estimates. But--

Russ Roberts: Which is why you're doing more than one.

Susan Mayer: Well, right. It's why I do more than one; and I also do several things to try and mitigate this issue of smoothing income. But that's an example of the kind of logic that I was using to do this.

I'll just give one more example that might be a little more straightforward. So, if income matters, then the source of income doesn't matter. A dollar is a dollar. A dollar buys the same thing whether it comes from earnings or whether it comes from welfare or whether it comes from the lottery. So you would expect that the source of income wouldn't matter. The source of income would have the same effect on any child outcome no matter what.

It turns out that some sources of income are more correlated with parents' characteristics than other sources of income. For example, earnings are fairly highly correlated with things like parents' education, test scores, things like that, so is welfare income. But something like what I call 'other income,' which is income from all kinds of sources like alimony or settlements for a lawsuit, something like that--those tend to be weakly correlated with parents' characteristics.

So we can look to see whether 'other income,' which buys the same amount as income from other sources, has as great an effect on child outcomes as these other sources of income that are highly correlated with parents' characteristics. And lo and behold, it doesn't. This thing called 'other income' is weakly correlated with child outcomes.

Now, you could come up with lots of explanations for why that might be true and I would agree with probably most of those explanations, but it's again an example of the way I was trying to approach this problem and approach it with four or five different ways that had different sources of bias. And then if they all sort of come out the same, it builds confidence that you've estimated this underlying true effect more accurately.


Russ Roberts: And after you've gone through all the different ways that you thought of doing that, you found they all tended to show a very small effect, and dramatically smaller than the standard effects that people had found in the literature before. Correct?

Susan Mayer: Yeah, that's true and there's a pretty good explanation for that. And, that explanation is that as parents' income goes up, they do buy more goods and services. So, housing gets better, there's more spent on groceries, there's more spent on eating out, people buy better cars, and so things get better. But those are not the things that predict kids' outcomes. Things that predict kids' outcomes are things like how much the parent reads to the child, whether the parent takes the child on outings. And it turns out those kinds of things don't cost that much money and they don't change that much when people get more money. So there's a good explanation for why there isn't this really big income effect.

Russ Roberts: I'm talking with Susan Mayer. I want to thank Plantronics for providing her headset, the Blackwire 5220.


Russ Roberts: Susan, when your book came out--I want to say, actually before we started talking, off the air, I told you I was going to identify you as a sociologist and you confessed to me that you don't do a lot of sociology. You've never been in a sociology department and you like to think of yourself as undisciplined, which--that's my new--I'm going to steal that. I'll try to remember to quote you when I can, but I love that. I'm undisciplined also, even though I'm trained as an economist. I have been in economics departments. But I love the idea of thinking a little more broadly. But, your work was a challenge to some economists, and others. What kind of reaction did it get when it came out?

Susan Mayer: Errh. Well, it wasn't always a friendly response. Let's put it that way. People accused me of undercutting attempts to help poor children. Of course, there's always a critique--

Russ Roberts: That's always fun.

Susan Mayer: Yeah. And there's a critique of the methods I used, and those I completely accept and think of those as a challenge, for others maybe better trained than me to go out and try themselves to do these true causal estimates. I think what people don't understand is that if you want to help poor children, you have to really know what help they need. You can't just think you have the solution--that would be money. You have to really have the solution, which might be something else.

I also never implied or ever said that I thought we should reduce the transfers we do make to poor families. It's also possibly the case that more income makes adults much better off. But, if we want to improve the test scores of children, if we want to improve how much schooling they get, if we want to improve their future earnings, if we really want to improve the lives of children, I think we should really be looking at things other than just raising their income.

Russ Roberts: The problem with your work, of course, and I'm sure this is the reason that people hated it--to just take a light verb, casual, relaxed stance toward your work--the reason I'm sure many people hated it, is that if it's not money, it leads to the question: then why are poor children, why did they do so poorly? And this is, it's a question I think--I talked earlier about the challenges of looking at a social issue broadly enough outside of just the stuff you can measure.

The other thing is, I think we do: So, we look at the things that we can measure and we also look at the things that are easy to solve, and measurability is an obvious reason for that, is part of that. But here the challenge is, is that if it's not money, it raises a very unpleasant thought, which is: Well then what is it? And people don't want to think about that, partly because it's not easy to fix.

The other thing underlying all this, I think that also drives me crazy, is the assumption we can fix it: 'It's just a question of how much money we spend or how to structure the program.' That all problems can be fixed, everyone can be happy, and it's just a question of will and reorganizing our political system. I think that's just a fundamental misunderstanding of the human enterprise and what causes human flourishing and our inability to understand the complexity of that.

But to return to my--sorry for rambling--your work forces the reader and the policy analyst who cares to then confront the question: Well, so now what?

Susan Mayer: Yeah, that's what I'm working on now. Because I just, in my own trajectory of research, I've always thought I would find the solution. So, you know, I thought it was neighborhood effects; and that turned out maybe not to be the silver bullet. Then I thought it was income and that turned out not to be the silver bullet. And I'm thinking, you know, well then I thought inequality is just, you know, it's relative income not absolutely income. Well, that turned out not to be the silver bullet.

And so I'm now thinking, well, there's not a silver bullet, which is I think, it's sort of what you're saying. But that shouldn't discourage us from trying to help especially vulnerable kids. It just means we have to take a totally different way of doing that, and that is the challenge.

Now we do know some things. We know that there are differences in parenting between high and low income, or advantaged and disadvantaged kids. We know there is less reading among low-income kids. We know there's more absenteeism in school. We know a lot about what goes on in families, we're just super-reluctant to do anything about the things that are different in families.

There's always been this idea that you don't interfere in families. I don't think you have to interfere in families, but I've yet to meet a parent who didn't want to be a good parent. I'm yet to meet a parent who thought they were a bad parent. Right now in the work I'm doing now, I work with lots of parents of preschool kids and lots of parents of Head Start kids. And so in some ways, I don't think it's really an information problem, but I do think that there are barriers that go well beyond income into the behavioral realm, that may be some low-hanging fruit for improving the lives of poor kids.


Russ Roberts: Let's talk about education, and I want to think about it in a broader way than it's often thought about. You actually said a few minutes ago, children having more years of education. But, of course, years in the seat, is not always education, particularly in poor neighborhoods. I used to believe that poor children got very poor education. I still think that's true. I don't think it's the whole problem, but I think it is a part the problem. They get poor education. There is a natural impulse to say, 'Well, we just need to spend more money.' It's a variant of what we've been talking about. There's a lot of evidence that that's not going to make a big difference, at least if we spend it using the current existing systems.

What optimism might one have or might you have to think that, if we could improve schools in the poorest neighborhoods, whether it's through money or charter schools or vouchers or other innovations--if we could improve those schools and if we could have effective preschool programs for poor kids--it's a debate of whether that's happening--what's your optimism that that could make a real difference? Or is that just something that might be an illusion as well?

Susan Mayer: Well, here's the way to think about that, or at least here's the way I think about it. I'll just ask you the question: What percent of waking hours between the ages of zero and 18 do you think children spend in schools? Take a guess.

Russ Roberts: It's a great question.

Susan Mayer: Well, I'll tell you the answer.

Russ Roberts: You tell me the answer. It's a rhetorical question, I know. Go ahead, Susan.

Susan Mayer: It's a rhetorical question with an actual answer. You know, it's between about 13 and 15%. It's not much. So, my thinking is, you can do things in schools. We know that we know some things make schools better and that when we make schools better, kids do better. But, the solution, if you're looking for a silver bullet or even sort of, you know, I don't know, a brass bullet, is not going to be in schools. We've got to do something about families.

Russ Roberts: Can I challenge that for a second?

Susan Mayer: Okay.

Russ Roberts: I love that point, I'm very sympathetic to it, and yet people like Rick Hanushek [Eric Hanushek], who has been a guest on this program, Raj Chetty, others have argued, 'No, it's all--if you could just have good teachers in schools, you could have enormous impacts on children's lifetime earnings.' Now, obviously, I don't think that's the only thing we care about; but it's one of the things we definitely do care about, is that transmission between human capital--education truly absorbed and earnings. And they find these huge effects. Do you not agree with them? Even through that 13 to 15% opportunity?

Susan Mayer: So, I think with extraordinary effort you can have substantial effects in schools. I don't think you can close the gap between advantaged and disadvantaged kids with schools only. And I think that that is a very expensive approach to the problem.

I think there are ways to get parents to do the things they actually want to do but aren't doing--things like read to their children, get their kids to actually go to school, things like that--using much less expensive techniques. Getting super-high-quality teachers in all the schools in the United States is--I think it's a great idea. I love that idea. I think it's just not possible.

I think that there's much less variance in the quality of schools already than there is in the variance of the quality of families. So I think we latch on to schools because there's a--it's an institution. We know how to change institutions. We know how to work with institutions. We know how to measure things in institutions. So it's reassuring to work with institutions. I'm all for it, but that's not the solution to the problem. In my estimation. The solution to the problem, in a sustainable way that is not so costly as to become prohibitive, is to get families to do the things that families ought to do, and mostly that they already know they ought to do.


Russ Roberts: Well, I'm going to ask you a variation on this education question, which is: I think one of the problems with our current education system, K-12 [Kindergarten through 12th grade], is that it's too cheap. And when I say that people are always, like, horrified. Like, 'Cheap is better, because then more people--you get more of it.' But my impression in life, and Milton Friedman used to say something akin to this, is that you don't treat things that people give you with the same care that you treat things that you spend your own money on.

And one of the challenges of measurement that is somewhat related to your issues is that, kids in private schools often, and poor kids in private schools, often do better than poor kids in public schools. And the standard answer as to why that is, isn't that private schools are better, say the skeptics. They say, 'Well, that's because the parents who send their kids to private schools are already motivated and they're different; they're not the same kind of parents. It's not--the only difference between them isn't that they spend a little more money on the private school: there are these unobserved differences.'

And my answer to that is: That's probably true, but it's also true that when you give somebody something, they don't necessarily treat it as well as if they have to spend their own money. And, the public school system basically says to parents, 'This is free.' And, maybe parents don't invest in it as much as they would if they had to spend money on it.

What do you think of that argument?

Susan Mayer: I think it might be credible, at least partly credible. I think, parents--yeah, I mean, I don't know, is the answer. I really don't know. I sort of agree with the premise that people take better care of things that they pay for, at least partially pay for. I don't know if that's the explanation for kids doing better in private schools.

Russ Roberts: But I raise it. I'm with you on that, by the way. And I appreciate your humility, which I try to share. But the claim would be that if you want parents to, say, spend more time investing in their children's schoolwork, homework, making sure that they do what they're supposed to do, making sure they're prepared for school the next day, one way to do that--and by the way, I don't think they should pay full price, I'm not suggesting that. They wouldn't be able to go. But to have a discounted price, severely discounted, but still pay something, I think is part of the reason, a potential way to get parents to be more involved with their kids' education.

Susan Mayer: Possibly.

I think there are other potential issues. Let's take the case of chronic absenteeism. Why do some parents not get their kids to school on time? And would they get their kids to school on time more if they had to pay for that opportunity? Maybe some parents would. I think that might be a motivator for some parents. But in--this is other research I'm doing--we find that just reminding parents to get their kids to school and giving them some tips, simple things, like, 'Put your kid's backpack by the door the day before, the night before school,' reduces chronic absenteeism by something like 20%. It's literally almost costless. Now, I'm not suggesting that is a solution for all of the problems that kids have. But I'm suggesting that we need to be more open-minded about the kinds of solutions we're willing to entertain.

And we need to think more about why parents make different decisions about their kids'--their kids' investments. So, why do some parents read a lot to their kids? Why do some parents play, you know, educational games with their kids? Why do some parents just let their kids watch TV? Why do some parents take their kids to the museum on free days? You know--I mean those decisions add up. They are what adds up. And there's a consistency to that kind of decision-making that differs by parents' characteristics.

Now, if you ask parents, 'Should you do these things?' And again, I'm citing some research that I'm doing now--every parent, rich, poor, educated, not educated, immigrant, not immigrant, every parent says, 'I should read to my kid every day.' Every parent says that. Every parent says, 'Yes, I should be playing games with my kid.' I mean, it is not that parents don't know what to do. It's that they just don't. And then the big mystery is why? Why do advantaged parents sort of suck it up and do it and disadvantaged parents don't? They want to, but they don't. I just think we have to try and understand that kind of decision-making that goes on.


Russ Roberts: So, I'm interested in that. I'm a little bit skeptical, partly because I know that when people answer surveys, you know, I'm not sure what that really means. It's always a challenge.

Susan Mayer: Sorry, these aren't surveys. These are experiments. Field experiments.

Russ Roberts: Yeah. Well, I have trouble with those, too. Right? You pay a lot of attention to people and it's a small group and the--

Susan Mayer: No, it's not a small group--

Russ Roberts: How big?

Susan Mayer: 1500.

Russ Roberts: Oh, that's not a small group. So, give me the outline of that experiment then, that gives you that conclusion.

Susan Mayer: So, I didn't mean to sort of divert us onto this current work.

The big point I mean to make is I do think we need to be very open-minded about how we can help parents themselves with that, you know, 85% of the time where the kid is, to do a better job of preparing their kid to take advantage of these great schools that we're going to have. And so this work that I'm doing now is basically field experimental work primarily with Head Start kids, using, well, as I've suggested, these behavioral tools to change the sort of behaviors that have been shown to predict, and as much as possible, causally predict better schooling outcomes for kids.

And so in some of these, we--one recent one is we have, we're trying to encourage parents to do math activities with their kids to raise kids' math scores. And so we send--it's sort of a complex experiment--but different parents reminders to do math. We also have one research on that uses just electronic math apps that the kid can use on their own. Another group gets messaging about how much math will improve their kids. And then we look at sort of the outcomes from these things.

And, you know, you're not going to--let's put it this way: If I had to choose between that and increasing income, I would choose those techniques because I think you get a bigger effect on kids' math scores or reading scores or absentee rates, than these other things.

If I wanted to choose a very expensive program, I might think of, you know, sort of an intensive intervention kind of program. But we don't have a lot of money right now in the policy world for doing intensive things. So I'm willing to work on the margins. And, that's sort of--you know, none of the other things that are big and expensive that I thought would work, ended up working much. So now I'm on these kinds of things.


Russ Roberts: Yeah. When I said I was skeptical about it, I didn't mean about the experimental results. I meant the idea that every parent thinks they should read to their kid. I just don't know if that's true. Let me put this in a different context. Okay? I want to totally shift gears on us. One of the things you talk about really nicely in the book is the emotional, philosophical baggage that Americans have on both sides of the ideological spectrum, that give them attitudes toward, say, welfare reform or whether their welfare should become more generous, less generous.

And I think one of the lessons--and you review some of the history, which we don't have time to go into but I enjoyed--of how we swing back and forth, different theories have providence and people get more excited about some than others, then enthusiasm fades. But, so, I want to take us outside of all those, that psychological and philosophical baggage that all of us have, and I want to think about it a different way.

So, here's the issue. Every American, excuse me, many Americans wish they weighed less. They feel overweight. They're a little obese. So we can think about different ways to solve that problem. People view it as not just a personal problem; a lot of people view it as a societal problem. It's correlated with other negative outcomes that have costs through the taxpayers. But, let's say we decided we want Americans to weigh--overweight Americans--to lose 20% of their extra weight. And I said to you, 'Okay, Susan, I'm going to give you a budget.' You can have different ways of solving this problem. And we can think about those different ways. We could incentivize people, we could pay them, we could give them an app that let them track their way, track their exercise. We could send them an email at night saying, 'Don't over-eat, be careful.' We could remind them of the negative effects of overweight, etc., etc.

At the end of the day, it's a really hard problem to solve. So my question is, and why? It's because it's hard to start. People like to eat and exercise isn't always that fun. We can do what we can to make it more fun--exercising. We can make eating less appealing. But it's hard. And I wouldn't purport--I wouldn't try to solve that problem. I'd say, 'Well, it's kind of up to people to do the best they can.' And some people are going to fail with willpower, and some people are going to succeed, and that's the way life is.

Is this problem like that or is it different?

Susan Mayer: I think it actually is quite a bit like that in many ways. My solution would be different than yours, though. Maybe I'm just an eternal optimist. But, I think it's hard to change behavior. It's very hard to change behavior, especially the kind of behavior that has long-term rather than short-term payoffs.

We tell people all the time, Being overweight is bad for your health. In some time, in some indefinite future, you're going to regret this,' and people still take the donut. You can be giving exactly that talk with a plate of donuts sitting in front of people and they will reach for the donut. I myself would reach for that donut. So that kind of, we'll call that present bias, present orientation, is one of the most important things that makes parents not do the things they think they should do for their kids. So, not read to their kids each night, not make their kids brush their teeth each night, throw pizza on the table rather than vegetables.

But there are techniques that can help for that kind of present orientation. And, in one of the experiments we have, by reminding parents to read and telling them how much they did read, people are also optimistic. If you ask people, 'How many calories did you eat today?' They will way underestimate it. By telling them exactly the truth about that and reminding them not to--to set a goal and stick to it, you can change behavior. We doubled the amount of time that preschool parents read to their kids using those techniques.

Well, you think, that's really a lot. That can have a meaningful difference down the road. It wasn't invasive. Parents liked it; they didn't hate it. Sometimes things like that can work. I don't want to overstate how much I think things like that can work, but I think there is room for optimism that we could change some behaviors that are meaningful and important.


Russ Roberts: So, I'll play pessimist again, all right?

Susan Mayer: Okay.

Russ Roberts: So, you enroll in my behavior-altering weight loss program, and for the two months you're on the program, you do great. I get on my low carb diet. I do great. I get the--and by the way, I just want to say to listeners: we've talked a lot on this program about weight loss. Not a lot, but a nonzero amount. And I recently over the last four months, lost 17 pounds just by keeping track of what the calories that I ate using an app called Lose It! That's a free app. I didn't get the premium edition. And of course I was surprised to see that keeping track of your calories is one of the techniques in a recent study that didn't work.

And I want to say, 'Well, it worked for me,' and I guess the right answer would be: Well, it worked for me for three months, and maybe it works for small number of people, but it evidently doesn't work generally for a long period of time.

So the question would be, your parents--who by the way I doubt you were in their house watching how much they actually read to their kids--but let's say they actually did double.

Susan Mayer: Actually we did.

Russ Roberts: You were?

Susan Mayer: Yes. We recorded their reading.

Russ Roberts: In what dimension?

Susan Mayer: We gave everybody a tablet and on that tablet was an app with 500 books, and the minute they opened a book, it began to record. So--

Russ Roberts: You're so ahead of me, Susan. Good for you.

Susan Mayer: Well, I wrote that book 20 years ago because I didn't think people were doing it right.

Russ Roberts: So, that's great. Now the question is, of course, a year from now, does it make a difference?

And then the next question would be--let's turn to this question because I think this is the more interesting general question. Let's say it's true. Let's say you really have found a set of behavioral modifications that make people better parents through these experiments. Many experiments tragically don't replicate: they don't replicate with different groups, they don't replicate across time. But let's say they did. Let's say that's true. Now, what? Should the government create these programs or should we allow private foundations to create these programs?

A long time ago we had Paul Tough on this program, talking about in passing related issues, and he mentioned in passing the Harlem Children's Zone, which is a sort of full court press of helping parents. It's a charity in New York City that said, 'We're not just going to make a better school. We're not just going to have an afterschool program for kids, we're not going to just have a program to help parents deal with money issues. We're going to do all of it. We're going to do everything because any one thing isn't enough, and we need to totally change the landscape.' It appears to be a fabulously successful program. I have no idea if it really is, but it appears to be. It's not cheap. Some people say it relies on the charisma of Geoffrey Canada, the founder, and he's hard to clone. Etc., etc.

So, what are your thoughts on how any of these insights might scale to make the world a better place?

Susan Mayer: Yeah, well that is the $64,000 question. I think we are--it's irresponsible not to look at long-term effects. I'll just plug my own research again. We are looking at least year-long effects, after the program ended. But changing behavior permanently is really different from changing behavior for the period in which an intervention is actually active. So that's a big deal.

Scaling--almost nothing scales. That is a huge, huge issue. I'm involved in a set of researchers who are looking at it, at those issues. There are a bunch of reasons why things don't scale, which I could go into, but maybe not at this time.

I forget your actual question here. You raised some of the issues with that--

Russ Roberts: It's all right. Sorry. Yeah. I was asking you to think about, let's say we find out that--it's sort of the idea that, one of the social, incredible social behavioral modifications in the last 100 years is, turning smoking into something that is hip, into something that is seen as unattractive. And, it was a combination of government social norms that emerged in response to that. Could we do the same thing with reading? If we thought reading was the gold standard, could we do that? Do we want government to play a role or should it just be private foundations? Should it be communities? Should it be community organizations like the Harlem Children's Zone that champion these things? That was the real question.

Susan Mayer: Yeah. So, I guess in some sense, all of the above when it comes to changing norms.

Actually, I think the norms on reading have been dramatically influenced. When I say 'All parents know they should read to their kid,' I mean every parent. When we survey parents, when we survey more than a thousand parents, a couple of thousand parents of kids in Head Start--so these are lower income families--virtually every parent says they should read to their kid and expects a return in terms of their children's cognitive abilities from reading to their children. That does not mean every parent reads to their children. It means that the norm of reading is very dominant, very, very dominant. And I think we can thank Head Start and all the reading programs that have been tried for raising the consciousness about reading.

Russ Roberts: Yeah, it's a start.

Susan Mayer: That does not mean people read. It is a start and it's been an effort. There are signs on the bus. It's in the schools, it's in the air. That's a good thing. The next step is to get parents who don't read to read. That's the harder step, and that's changing behavior of a set of parents.

So, I don't think that we have to decide that this has to be the responsibility of one group or another. I think we need a more consistent and agreed-upon idea of what is important about parenting. Advantaged parents do a lot of things they don't need to be doing, and disadvantaged parents to a bunch of stuff--they're not doing things they should be doing. Parenting isn't like that much rocket science. You need to have a consistent environment, you need to give nutritious food to your kids, you need to read to your kids, you need to play games with your kids, you need to protect your kids from harm. I mean you don't have to be a helicopter parent to be a good parent. In fact, you probably shouldn't be a helicopter parent to be a good parent.

Russ Roberts: So, I'll give you an example from my childhood that I think shows some of the challenges that this is: My parents--I think I read, I know I read above the norm in terms of the amount I read a year. Just the stuff I read for EconTalk to start with--I read probably 20 to 25 books a year just for EconTalk, and I read some books outside of that. I just assume that puts me above the national average. But here's what's interesting. My parents I don't think read much to me, and my father really dislikes reading to kids. He would not read to my kids. He likes to tell stories, which is similar but not the same. But what he did do--my mom less so--but my dad was an incredibly avid reader himself.

So, my love of reading comes from my dad even though he did not read to me hardly at all, which is just interesting. He also smoked two packs of cigarettes a day. I've never put a cigarette in my mouth. I found it disgusting. So, ne of the challenges is, is that parents who read to their kids but don't read themselves, isn't probably nearly as effective as parents who read to their kids and read themselves. And so it just shows, to me, part of the challenge of, just how challenging this problem is.

Susan Mayer: Yeah, I agree. I think it is challenging. The other thing is, I don't remember my parents reading much to me either. I think norms about reading have changed dramatically in the last 50 years or something.

But parenting is in some sense like competition, right? If no parent ever read to their kid, it wouldn't matter if parents read to their kid. But when advantaged parents read to their kids, it becomes really important for disadvantaged parents to read to their kids.

So, it's not just--I mean, there are certain things you can do that protect your child from harm and from--perhaps there's even certain nutritional things that are important--I don't know that much about nutrition. But when it comes to these kinds of things that make you successful, that's a competition.

And so you expect norms to change over time; and that makes it also really challenging because it's a matter of, in some sense, keeping up with who's ever doing it. I mean, there's diminishing returns; but keeping up with the changing norms about things. And, it's always the case that disadvantaged parents are going to be somehow behind the curve on that.

Russ Roberts: Well, I do want to add, in line with what I said before, that, while I do think that reading helps increase income through better school results and test results, etc., that would not be the only reason I would read to my kids. It's like one of the greatest human things that there is. It's just a good thing to do. But it does help, too.


Russ Roberts: I want to close with a statement I hear sometimes; and it illustrates the challenges of causation and how to think about these issues, I think really beautifully, and I want to get your reaction to it.

A friend of mine said to me the other day, 'Oh, you know, people say it's hard to--a lot of people are being left behind in America. It's easy. All you have to do is not have a kid before you get married, graduate from high school, go to college, get a college degree, get married, stay married, and you'll prosper. Those people are doing great.'

Susan Mayer: Yep, that's true. But it's not always--it's not as easy for some people as for others to do those things. I mean, it's true that if you do everything right, you probably--you won't be a long-term poor person. We also have to get out of the idea of thinking of the poorest as always long-term.

But, on the other hand, what if that person had come upon a debilitating disease? What about that person having trained for a job that becomes obsolete?

There are bad things that happen even to people who do all the right things. And some people who don't do all the right things do prosper. So it's true that we know a set of behaviors that if you can manage to do them, will probably protect you. But not everybody can manage to do those things--for a whole bunch of reasons. And, not everybody who does those things will be protected. And so, yeah: My advice is, yeah, go to college.

Russ Roberts: But the deeper challenge, I think, is that--in line with your work--is that the people who do those things are not the same as the people who don't. And the idea that you can just therefore subsidize those activities or incentivize them in different ways or nag people to do them, doesn't mean they'll have the same outcomes. And I think, in many ways that is the essence of the challenge of social science. People with more education make more money than people who don't, but as Bryan Caplan has pointed out, it's not clear whether that means that if you could get more education for those other people that they would prosper.

Susan Mayer: Well, imagine everybody had a college education. This always drives me nuts when people say, 'Oh, we just need to increase the number of people going to college.' Imagine everyone has a college education. We will still have great variation in earnings and wages because other things will become more important. Because the last person to get an education is going to be really different from that first person who got an education, a college education. And so we're going to use other things to triage people. It is not just a matter of getting people in colleges. It's--I mean, people are going to triage on a whole bunch of characteristics that have to do with productivity.

Russ Roberts: Grit, persistence, drive, ambition, care, reliability, responsibility. The things we can't measure.

Susan Mayer: Yeah, I mean, a whole lot of things. Possibly we could measure those things, but they're much harder to measure. We certainly didn't used to think about those things very much. It's good news that we're thinking about them now.


Russ Roberts: Actually, I want to add one more thing to get you to react to, because you brought it up and it's such an interesting issue. We had Mauricio Miller on the program, and I'd say there were two things in his book and in his conversation with me that I think resonated with listeners, or at least they found surprising.

One was that the right way to help people is to leave them alone in some dimension: Help them form communities to help themselves through their neighborhoods and their friends and connections they make. Invest in them in ways that are, not just the standard ways of giving them money. And that resonates very clearly with your work.

But the second thing he pointed out that I think surprised a lot of people, and you've just said it again, so I want you to close with describing that in any more detail that you can: he was very eager to point out that people aren't just poor. That the number of poor people in any one year are not going to be poor in the future necessarily.

And, I think there's a view that in America we used to be a more mobile society. It's not clear to me that we are less mobile, in different ways of defining it, of course. But there's this view that I definitely think is wrong, is that we've become a class society. That: There's the rich, top 1%, the top 20%, the bottom half, the bottom 20%, the poorest people--as if they stay in those groups all along. And when you look at the data, and I know you've looked at it, you're surprised to notice how any one year's measure of income is very unrepresentative.

So talk about what we know about that.

Susan Mayer: Well, I mean, I think you've summarized what we know about it. There is mobility across income groups in the United States. I don't know if that kind of--I think intergenerational mobility has changed much. I'm not sure about mobility within generations.

But, now I think the number of people who begin a spell of poverty who were poor three years later, is only something like 5% or 6%.

When we talk about poverty in the United States, we tend to be talking about the persistently poor people: people who are poor for a long time, people who live in poor neighborhoods. And that is actually a relatively small proportion of all the people who are poor in any one year or who ever become poor.

I think--I could be off on these numbers, but I don't think I'm off by a lot--something between, around 60%, let's say, of the adult population has been poor at some point in time. I mean, that's a lot. I mean, we don't think about college students, who are often counted as poor. People who lose their job this year but get another one--they can be counted as poor. And people need different things depending on which kind of poor they are. So, the Harlem Children's Zone is great because it can focus all those resources in a geographical area. But most poor people don't live in an area like that. And most even long-term poor don't live in an area like that. So, it makes it harder to imagine how are you going to get to people who aren't in a community of poor but who are long-term poor?

So, I think we have a very unnuanced view of who is poor, including which children are poor and where they are. You know, a great deal of poverty is in suburban areas, for example. And so we have to think of how we can help all those types of poor. I think this idea of sort of triaging the poor is a good one, where, when people fall into poverty, probably the best thing you can do is just give money. People who are poor this year but not next are more or less just like everybody else: they just are fallen on hard time. But that's really different from what a family who's been poor for five years needs. They may need much more social worker kind of model to help them out of poverty.

Russ Roberts: My guest today has been Susan Mayer. Susan, thanks for being part of EconTalk.

Susan Mayer: Oh, thank you very much.