The right way to bribe your kid

Come on, you know you've thought about it. Here's the most effective way to turn dollars (yours) into action (his).

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By Tyler Cowen, Money Magazine contributing writer

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(Money Magazine) -- Before you jump all over me, let me remind you that this isn't The Ethicists. I'm a behavioral economist. And so I ask not: Is it morally right to bribe your kid to get him to do the stuff you want him to do? I instead ask: Does bribing your kid work? And if so, how does it work best?

To add to the challenge, let's assume that the kid in question isn't some malleable six-year-old but a young adult. Maybe he's a recent college grad who is unenthusiastic about the old nine to five, so he's boomeranged back to his familiar position on your couch. Your goal is threefold: to get him off his butt and into a job, to get him to move out and, in the meantime, to get him to stop strewing his smelly socks and unwashed dishes all over the house.

Spanking won't work - which brings us to the question of bribery. Paying for results seems like an easy solution, right? After all, it works at your favorite restaurant. But what works with a maître d' is fraught with danger at home. That's because of one core problem: Bribery removes a sense of obligation.

If you pay a kid to pick up his dirty clothes, for example, you're sending the message that leaving the mess on the floor is an acceptable option. He has the choice of picking up the offending items or forgoing the money. Whether you know it or not, your offer of a payment announces that everything is negotiable. And because your kid has a long and well-remembered history of wearing you down in the past, he has the advantage in the long-term negotiation.

On top of that, your payment is more of a joke than you realize. Most parents funnel money to their grown kids, if only by helping out with purchases every now and then. Children aren't stupid. They know that if they earn more money now, they'll probably score less of your money later on. You think you've set up a market based on payment for service, but your kid knows better. The clothes stay on the floor.

Back in the 1980s, an MIT economist named Bengt Holmstrom demonstrated that bribery works best when there are two parties involved: a co-payer and an enforcer. In this case, the co-payer is you. You might offer your kid $50 for every $100 he earns at a job. That encourages employment by rewarding success, not failure, the same principle behind the government's earned income tax credit. The enforcer is the employer - the one who ensures responsible behavior. You can't fire your kid, but bringing in the boss gets around this problem: The boss won't hesitate to can him if he doesn't produce. The fact that a kid at work is not a kid leaving crumbs on the kitchen counter is just a bonus.

If your child prospers, your co-payments will help him make the rent on his own apartment. Speaking of an apartment, consider offering to pay the entire rental deposit if the kid moves out within three months, and offer to pay half of the rental deposit if he moves out within six months. That encourages him to work overtime and save like mad. The amount that you'll be out for the deposit, you'll likely save on food.

In the meantime, don't nag. Telling your adult kid what to do is not a game you can win. Don't believe it? Invite your parents over for a visit and see how well that tactic works on you.

Tyler Cowen is a professor of economics at George Mason University. Send your comments to money_letters@moneymail.com.

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