What is it about home that matters?
For a long time, scholars and policymakers thought that a family's income heavily affected how well kids did in life. This is why, for example, decades of federal welfare policy were based on transferring cash to poor parents. Data from "Expenditures on Children by Families," an annual report by the U.S. Department of Agriculture, show that as families get richer, a lot of that extra money goes into their kids. Low-income and middle-income families spend similar amounts — about $9,000 and $13,000 per child, respectively, per year. But families making more than $100,000 spend about $22,000 per kid per year. (I assume most of the increase goes to private-school tuition.) Given that the children of higher-income families typically do better in school and earn more as adults, it would be reasonable to conclude that the more my wife and I spend on our kids, the brighter their futures will be.
But that might not be the case. When Susan Mayer at the University of Chicago looked at the relationship between family income and lifetime achievement, she saw that many of the character traits that allow some adults to make a lot of money — a strong work ethic, honesty, reliability, good health — also make them good parents. Mayer wondered whether it is those traits, rather than the money that results from them, that really counts.
That makes sense to me. It seems that my impact on my kids has much more to do with who I am and how much time I spend with them than how much I earn.
In an influential book, "What Money Can't Buy: Family Income and Children's Life Chances," Mayer put her hypothesis to the test. She ran a series of experiments that measured the relationship between family income and a range of life outcomes, such as a child's likelihood of dropping out of high school or getting pregnant as a teenager. In one study after another, she found that such outcomes weren't caused by income.