CHILDREN AS HUMAN CAPITAL (COMMENT).

CHILDREN AS HUMAN CAPITAL (COMMENT). Nick commented here that he rarely thinks of the family as an economic unit. Kids, it may surprise you that—when economists look at families—you can be considered as either consumer durables or as investments in human capital. Gary Becker won the Nobel Prize in economics in part for his pioneering work in this area. Parents can be considered as treating children as consumer durables when they take pleasure in their children’s charms and accomplishments. They can be considered as treating children as investments when they hope that the children will care for them in their old age. Note in the wikipedia article that a major component of investment in human capital is opportunity cost. A mother’s time in child care could be spent earning income; similarly, when you go to college an opportunity cost is what you could have earned if you had a job.