science

Parental dividend

Parental dividend is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Parental dividend rather than just read about it. In short: The parental dividend is a policy proposal first suggested by economist Shirley P. Burggraf during a Bunting Fellowship at Radcliffe College.

Key takeaways

Parental dividend belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Parental dividend to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Parental dividend from memory before moving on to harder problems.

Reference excerpt

The parental dividend is a policy proposal first suggested by economist Shirley P. Burggraf during a Bunting Fellowship at Radcliffe College. It proposes replacing the current generalized labor market funding apparatus of the US Social Security system with one that preferentially rewards parental labor and investment. While the current US Social Security system collects payroll taxes from working adults and redistributes them to retirees in amounts based on pre-retirement earnings, the parental dividend is a retirement benefit calculated according to the income of one's own adult children.

Background Shirley P. Burggraf's parental dividend is described in The Feminine Economy and Economic Man: Reviving the Role of the Family in the Post-Industrial Age (1997). The proposal has been described as an atypical feminist approach to solving crises of the American family unit by relying on market forces. According to sociologist David Popenoe on the topic of the parental dividend, “We should launch a society wide discussion of what would be the most far-reaching family policy of all: restructuring the national Social Security system.”

Theory Parental dividend theory is based on the idea that the future productivity of children can be helped or harmed by Social Security payments made in real-time by families to retirees. Financial knock-on effects of the parental dividend depend on a link between the long term successes of children and the amount of time parents spend rearing them. The greater the parental investment in terms of time and money, the greater a child's income is likely to be in adulthood. By changing the financial system supporting Social Security to preferentially assist parents in retirement, the work and costs of parenting become valuable and children raised in this environment would have a greater potential to earn more as adults, therefore resulting in greater retirement benefits for their parents. According to economists Burggraf and Grossbard-Shechtman, Social Security with a parental dividend would remove the burden of paying for retirement twice, first in payroll taxes for one's own retirement through the US Social Security System, and simultaneously paying for the retirement of one's parents receiving low Social Security benefits thanks to their own opportunity costs of childcare. The concept links expenses associated with raising children, especially the opportunity costs of lost wages, to workers' time outside the work force resulting in reduced Social Security benefits. In this way, the parental dividend seeks to address a potential financial problem in the current US Social Security system, namely that the largest Social Security payments currently go to retirees who spent the least amount of time raising children.

See also Balancing pension funding Child tax credit Cost of raising a child Tax on childlessness

References

Worked examples

Example 1 — a first encounter with Parental dividend

Start with the simplest possible case. Write down what Parental dividend claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Parental dividend before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Parental dividend ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Parental dividend

In research: Parental dividend appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Parental dividend in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Parental dividend is common in secondary-school and first-year university syllabi. It links to neighbouring topics Economic policy, Fatherhood, Feminism and law, so understanding it makes those chapters shorter.
In everyday life: Look for Parental dividend outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Parental dividend in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Parental dividend means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Parental dividend out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Parental dividend in simple terms?

The parental dividend is a policy proposal first suggested by economist Shirley P. Burggraf during a Bunting Fellowship at Radcliffe College.

Why does Parental dividend matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Parental dividend?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Parental dividend.