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The University of Southampton
Economic, Social and Political Sciences

Are parents really generous towards their children?

Published: 23 March 2008 Origin:  Economics

If parents got more money, would they spend the extra on their children or themselves? Dr Jackie Wahba and Dr Christian Schluter have set out to discover whether parents are altruistic or selfish.

Their research is based heavily on evidence from a major welfare program run by the Mexican government in rural areas. Economic models featuring parents and children usually assume that parents are unselfishly devoted to the welfare of their children. Many poverty alleviation and other social programmes are designed on this basis. But the empirical evidence typically rejects the altruism hypothesis.

Jackie and Christian’s investigation is based on a unique large scale data set from the welfare program PROGRESA which provides educational grants to families designed to promote school enrolment and attendance, provide resources for improving the quality of schools, increase the quality and availability of health care, and give money and nutritional supplements to families.

To test whether parents are altruistic, Jackie and Christian examined the change in budget shares spent by households receiving PROGRESA benefits on food, boys’ and girls’ clothing, toys, adults’ clothing and tobacco. Their conclusion is that if parents are altruistic, budget shares on children’s clothing and toys would increase and the budget share on adults’ goods would not.

The findings of the research suggest strong evidence for parental altruism in Mexico, parents are spending the extra money on their children.

Jackie and Christian are continuing their work in Mexico. Their next project examines the impact of poverty and vulnerability on migration from Mexico to the US.

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