Becoming parents: the market for children
Scholars with interdisciplinary interests are increasingly turning to the new field of sociobiology, which explains human behaviour, in important part, in terms of people’s desire to maximize the success of their own genetic heritage.
Popular accounts which are important for students of the family include Ridley (1992) and Wright (1994). The biologists were not the first to discuss this important ingredient of tastes. For example, Anderson and Tollison (1991) write about children’s behaviour, which they describe as rational because each child attempts to get as much parental attention and care as possible. Even earlier, Gary Becker and others (Becker and Lewis, 1973; Becker and Tomes, 1976) have described the interaction between the number of children and the time or goods that may be devoted to each child, hypothesizing that the available resources parents can allocate are fixed.But even before parents can invest in their children, they occasionally must bring children from other families into their own through adoption or, more recently, surrogacy. Landes and Posner (1975) wrote a controversial essay suggesting that adoption laws, which forbid any explicit payment for children, be relaxed so that the large and inelastic demand for children can be met by a larger supply of adoptable children. Many unexpected pregnancies are terminated through elective abortions in countries where the latter are legal. Other law and economics scholars have supported this and later Posner work on adoption (Posner, 1987, 1992), urging that a legal ‘market in babies’ be extended to surrogacy arrangements, in which a married father’s sperm are implanted in a woman other than his wife who bears the child for the married couple (Cass, 1987; Epstein, 1995). Cass, while realizing possible objections to surrogacy arrangements, noted that surrogacy allows some relief for couples who increasingly find it difficult to adopt, and make parties on both sides of the transaction happy.
Epstein suggested specific enforcement of surrogacy contracts since damage remedies would probably not be effective and since certainty would benefit all the parties to the contract. Prichard (1984), however, disapproved of a ‘market in babies’ for largely philosophical reasons, while Trebilcock and Keshvani (1991) approved of surrogacy in general, but only if the contracts involved a waiting period after the child’s birth before consent would be final. Brinig (1995a) suggests that surrogacy contracts should not be specifically enforced because of information asymmetries, third-party externalities (the effect on the surrogate’s other children) and market asymmetries allowing middlemen to exploit parties on both sides of the contract. In other papers, Brinig (1993, 1994d) discusses the negative effect on the adoption rate of increasing transaction costs by allowing birth mothers to revoke consent. Like Cass (1987), Prichard (1984) and J. Cohen (1987), she is concerned about the effect of surrogacy on hard-to-place children who currently can expect lengthy placement in foster homes.Foster families are technically hybrids between biological families and paid child carers. They therefore involve particularly complex principalagent problems (Schneider and Brinig, 1996b). Because foster parents are not guaranteed permanent relationships with the children for whom they care, they do not have the incentives to treat them as well as they would their own, as Grubb describes with the historical practice of indentured servitude (Grubb, 1985). However, because many foster parents are, in effect, repeat players, meaning that they have several sets of foster children, they have reputation effects to consider. This may cause their behaviour to remain within the acceptable level, but at the same time may keep them from forming strong psychological bonds with the foster children. Further, particularly in the minority community, they are often blood relatives of their foster children.