‘A parenting style that abjures risk at all costs’ may be bad for the economy

by Grace

A parenting style that abjures risk at all costs may be at least partially responsible for the country’s economic doldrums.

Mollie Hemingway makes that bold statement in a blog post describing tricycle helmets for preschoolers and parents’ fears about letting youngsters mow the lawn.  The tendency to protect children from all risk is not healthy.

So to sum up, letting your child take risks allows them to conquer fear and develop “a sense of mastery.” Irrationally shielding them from risk creates phobias and psychopaths.

Excessive risk avoidance may even affect economic growth.

… a parenting style that abjures risk at all costs may be at least partially responsible for the country’s economic doldrums. In June, the Wall Street Journal pointed out four trends, observable since the 1980s, that showed a marked declined in risk-taking psychology. “Risk Averse Culture Infects U.S. Workers, Entrepreneurs” notes that ongoing job creation and destruction has slowed, that investors are less willing to back startups, that startups in general are down and that the workforce itself is resistant to migration and job change.

So maybe it was a mistake to hire a lawn service instead of making my kids mow our lawn?

.. If we’re ever going to fix America, we have to understand that freedom’s just another word for letting the neighborhood kids mow your lawn.

A bit dramatic, but I see the point.

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5 Comments to “‘A parenting style that abjures risk at all costs’ may be bad for the economy”

  1. Given that the economic decision makers (higher ups in banks, venture capitalists, equity firms, etc) tend to be of an age to have been brought up in the non helicopter age, I doubt that is the cause. Far more likely is the fact that the economy almost went off the deep end in 2009, and the collective heart attack is still affecting everyone. I had a front row seat at that debacle because of where my husband works, and I will never forget the deep terror at his company.

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  2. Also, many analysts point to the lack of guaranteed health insurance as a huge disincentive to entrpreneurship. People in their 40’s and 50’s are the most likely to start companies, but if they can’t get health insurance due to preexisting conditions, they aren’t going to strike out on their own. I have known people in that exact situation. I was reading the other day that one of the good effects of Obamacare will be to encourage more people to start their own companies.

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  3. Lack of health insurance could certainly be a disincentive to entrepreneurship, especially if there is a growing reliance on government for more services.

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  4. It isn’t really a reliance on government services. Picture a 50 year old software guy at a big company who has a great idea for a software startup, and has a lot of experience. But he also has diabetes and high blood pressure. Before Obamacare, he wouldn’t be able to get insurance, so he wouldn’t have dared abandon his job to pursue his startup. There are a lot of people like that, who might now think of starting their own businesses if they can get insurance.

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  5. Of course, much of this is speculation. I ran across this a few days ago in a piece titled 11 Pieces of Obamacare Conventional Wisdom That Shouldn’t Be So Conventional

     Breaking the link between health insurance and employment will spur entrepreneurship. There’s a decent amount of evidence suggesting that access to health insurance outside of your job reduces what economists call “job lock” — people who stay tied to a job when they’d rather be elsewhere. This has led a lot of observers suggest that we might be on the verge of turbocharging our economy by unleashing a wave of entrepreneurs who are currently tied to their job for the insurance.

    It’s a compelling, and entirely plausible, story. But at this point, it’s just a story. For a lengthy discussion of the various studies, and why we might or might not believe them, you can readthe piece I wrote this summer. The TL;DR version is that people who have a chronic illness end up tied to their jobs for lots of reasons — you don’t want to take many risks if you, or a loved one, might have a medical emergency at any moment, so it’s not clear how much health insurance, rather than the steady paycheck, accounts for the job lock. And while ending job lock may unleash entrepreneurship, it may also encourage people to exit the labor force earlier than they otherwise would, creating a net drag on the economy.

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