Rotten kid theorem

Rotten kid theorem

At the core of Becker's economic theory on the family, which he developed on the basis of figures for United States families in 1981, is the "rotten kid theorem". He applied the economics of an altruist to a family, wherein a person takes actions that improve the well-being of another person, despite more self-interested action being feasible. Becker pointed out that a parent forgoes higher income, by focusing on family work commitments in order to maximize a well-meaning objective. Becker also theorized that a child in a US family may be perfectly selfish because it maximizes its own utility. There have been attempts to test this economic thesis, in the course of which it was found that cross-generational families do not necessarily maximize their joint income.