The Free-Lunch Father Problem at Jackson Hole
Claudia Goldin, the Harvard economist who won the 2023 Nobel, opened the Federal Reserve Bank of Kansas City’s Jackson Hole symposium on Friday with a paper explaining low fertility in advanced economies. Her story is simple: as women’s education and career opportunities expanded, they delayed childbearing and had fewer children. Fertility can recover, she argues, only if more men become “dependable” caregivers—that is, do more unpaid labor at home—or if governments substitute with subsidized childcare and paid leave.
It’s a compelling headline: fertility depends on whether men do their share of housework. The problem is that her model builds that conclusion in by construction. It precisely prices women’s opportunity cost and leaves the cost for men out entirely. The result is a fertility model built on a free lunch.
Goldin’s Model Without a Price Tag
In Goldin’s simple framework, a college-educated woman earns a higher wage. If she has a child with a “traditional” man who doesn’t share child care, she drops to a lower-pay track and bears a “child penalty.” If she has a child with a “dependable” man, she keeps the higher wage. The higher the share of dependable men, the lower the expected cost of a child, the higher fertility.
What’s missing? Any income loss for men when they provide more care. There is no male wage variable, no overtime premium, no promotion ladder. Dad can stay at the office until midnight, or cut back to pick up the kids, and—on paper—the family’s income is unchanged. The father’s “dependability” is simply free time at home. Unsurprisingly, when you turn that dial upward, births rise.
To put it differently, Goldin’s setup effectively treats men as leaving money on the table: the model prices mothers’ career penalties but doesn’t price fathers’ foregone earnings, so doing more housework appears costless for men. “Dependable fatherhood” becomes free money—turn the dial toward more dad-time and births rise, with no recorded hit to household income. That’s not revealed preference; it’s an omitted-cost assumption dressed up as a result.
The definition of “dependability” is also loaded. In this vocabulary, dependability means doing care, not earning to fund care. A father who puts in long hours and secures the household’s main income stream is labeled “traditional” and thus a drag on fertility. That stacks the deck toward the conclusion that men’s behavior—rather than workplace design, parenting norms, or household specialization—is the margin that must move.
Price Both Ledgers
This omission isn’t trivial. High-earning jobs—especially those men disproportionately hold—are often “greedy jobs” that pay premia for long, unpredictable hours and continuous availability. If dad cuts those hours to be more “dependable,” the household typically gives up overtime, bonuses, and promotion rungs. Since men, on average, still earn more than women, that foregone income can easily exceed the mother’s penalty. Goldin nods at this in prose—couple equity is “more expensive” when jobs are greedy—but because the father’s earnings never enter the objective function, the free lunch remains. The model’s comparative statics inevitably say: raise dependability to raise fertility.
And that matters for policy. If a father contributing more at home lowers household income, the conclusion that “more dad time” boosts fertility can flip. In many households, the efficient margin is some mix of purchased childcare (think babysitters), job-design changes that allow for more flexibility for those in top roles, and—yes—maternal specialization financed by the higher earner’s income. More often than not, that higher earner is the father. A model that refuses to price his earnings can’t discover when those alternatives dominate.
Goldin’s escape hatch is institutional substitution: subsidized childcare, longer paid leaves, marketized care. But the evidence is uneven. Some European systems may help; Japan’s expansive push hasn’t delivered a baby boom. Once you admit that dads’ time isn’t free and that institutions don’t automatically work, the right question isn’t moral but mathematical: which lever delivers the most completed births per dollar of foregone income (or subsidy) with the least damage to productivity and lifetime earnings?
A better baseline starts with total household income. Put both parents’ earnings—and nonlinear returns to hours—into the budget. Let households bargain over time. Allow firms to respond by redesigning jobs. Under that baseline, “dependability” can mean either direct care or income that reliably buys high-quality care or compensates for a mother’s lost income, and the efficient solution is no longer making sure dad is doing more childcare.
Goldin’s Jackson Hole presentation deserves attention. It takes a swing at one of the era’s most serious challenges—the dearth of babies. But investors, executives, and policymakers should not be lulled into thinking fertility is a simple function of paternal virtue. When the model leaves out men’s income, “dependability” looks like a free input. In the real economy, it isn’t. Until economists put both ledgers on the table, prescriptions about fatherly dependability sound less like analysis and more like ideology.
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