A Family-Based Social Contract

Policy Paper
Nov. 25, 2008

Executive Summary

Americans instinctively revere the family as an institution that helps facilitate all other aspects of life. The family fosters attachments across generations, provides a nurturing environment in which to raise children, and is a means of transmitting values from one generation to the next. It is the foundation upon which our social contract has been built.

Historically, public discussions of the social contract have largely ignored the role of families. In a pre-industrial world in which children both performed economically useful tasks while young and, as adults, offered vital support to their aging parents, it was easy to assume that the family as an institution could be relied on to take care of itself.

Today, however, the economic basis of the family is largely eroded. Children are no longer economic assets to their parents, but costly liabilities. Due to the growth of Social Security, Medicare, and private pension schemes, support in old age no longer depends on an individual’s decision to raise a family, but on other people bearing the burdens of parenthood so as to produce the vital human capital to keep the system going. Meanwhile, the widening life options of a secularized society raise the opportunity cost, for both men and women, of nurturing the next generation.

One result of these changed circumstances, in all advanced nations, has been a dramatic fall in birthrates,often to well below replacement rates, and rapidly aging populations. At the same time, the state of family life has become deeply problematic, with high rates of divorce and out-of-wedlock births, and increasing downward mobility among parents.

Other sectors of society have effectively appropriated for themselves much of the value in human capital created by families, contributing to the strain on parents and a decline in overall fertility rates. Public policy and current law stacks the odds against those who choose to raise children.

We need to make major adjustments to the social contract in order to allow parents to retain more of the return that comes to society through their investment in children. Because stable families make a great difference in the lives of children, the next social contract should support them. Because having and raising children is a public good, the next social contact should focus on supporting parents and children as early in life as possible.

For the complete principles paper, please see the attached PDF below.