Anorak News | Rich People Are Bastards, Aren’t They? We Have Proof!

Rich People Are Bastards, Aren’t They? We Have Proof!

by | 24th, August 2011

RICH people are bastards, aren’t they? And look, here we have it, absolute proof!

Increasing a person’s wage can cause a significant drop in the amount of time they spend helping their parents with household chores, errands and transport.

For every ten per cent rise in their salary women will spend 36 per cent less time providing care and men will reduce their input by 18 per cent.

The more people get paid the less they are willing to take care of those aged parents who sacrificed the best eyars of their lives to have and educate them.

Bastards, eh?

That’s not really quite what the researcher found although I’d not be surprised to see it reported that way at some point. Along with the idea that if we just taxed the rich more then they’d be nicer to their parents.

The full paper is here and there’s two things to note. Firstly, that it’s from Kiev: how wondrous to see good economics coming out of the East after the near century of communist lunacy. The second is that it is good economics, just not surprising economics. What she’s done is measure, more carefully then others had before, what we were all pretty sure was happening.

Think of it this way: there’s three things we could be doing. Looking after aged parentals, going to work or loafing about at our leisure. How much of each we do will depend upon the relative prices of each of them. Price here doesn’t mean just cash, in fact what we’re really talking about is opportunity cost: how much of one do we have to give up to do either of the other two.

Leisure is fun, so we like to do that but the cost of doing it is that the parentals crumble away starving because they’re too old to cook any more and we go bust because we haven’t earnt anything. We could spend all of our time caring for our parents and go bust and also be cranky because we’re not having any fun and so on: create your own costs matrix of all the possible combinations of the three if you wish.

Now, if you raise people’s wages then you’ve just changed the relative prices of those three things. You’ve made leisure more expensive because you lose more money by not working: the same applies to that caring for the parents.

And yes, it is a general rule in economics that things that are more expensive people buy or do less of.

And as to that difference between men and women, we really do expect that too. It’s again a general finding, that women are more sensitive to tax rates (which can also be read as changes in income from work) than men are. So much so that it’s been seriously suggested that income tax rates should be different for men and women.

Posted: 24th, August 2011 | In: Money Comment | TrackBack | Permalink