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No Easy Money for Russian Schoolchildren

More than one-third of Russians are paying their children for academic success and household chores.

STUDY'S AUTHORS:

Alina PishnyakDirector, HSE Centre for Studies of Income and Living Standards.
Natalia KhalinaSenior Researcher Fellow, Institute of Humanitarian Megacity Development.

Normally, parents help shape their children's attitudes towards money. In their study "Adults' Perceptions of Pocket Money and Cash Rewards as Tools of Children's Economic Socialization," Pishnyak and Khalina compare parental attitudes towards pocket money in the U.K., Germany, and Moscow, Russia. Their findings concerning Moscow are based on data from the Moscow and Muscovitessurvey of 3,109 adult respondents, of whom 75% were parents, conducted by the Institute of Humanitarian Megacity Development in 2014. According to the study's authors, most parents begin educating their children about money at the age of six.

Cash as Gift

Respondents in all three countries agree that children should be given pocket money, but beyond that, attitudes differ. Thus, 74% of Muscovites believe that children should receive pocket money, but only 57% agree that such allowances should be increased annually. In Germany and the U.K., 70% of respondents agree with both statements.

At the same time, British and German parents (72% and 90%, respectively) are more likely than Muscovites (65%) to believe that children should agree with them in advance how their pocket money can be spent.

The question of whether or not children should be encouraged to have a part-time job while at school also divides the audience: British respondents are 1.5 times more likely to agree with the statement (88%) than Muscovites and Germans (56% and 54%, respectively).

Other ways for children to have pocket money include receiving cash as a gift (46% of Muscovites vs. 77% of British parents) or reward for doing household chores (44% of Muscovites vs. 66% of British parents). German parents responded to the above questions in a similar way to Russians, but differed as to whether children should be paid for good grades (39% and 42%, respectively, of Russian and British respondents vs. 53% of German respondents).

Thrifty Not Trendy

Attitudes towards saving and spending money differ across countries: while just 60% of Russian and German respondents encourage their children to save money, 90% of British parents do so. Whether to save or spend cash received as a holiday gift is a different matter: about 80% of British and German respondents but only a third (35%) of Russians would encourage children to save rather than spend it.

Attitudes toward donating to charity also differ significantly: Muscovites are 1.5 times more likely than German and British parents  (59% vs. 39%) to encourage charitable giving from pocket money.

Educating children about the use of a savings account was mentioned as important by 65% of British respondents, 55% of Russians and 52% of Germans. Russians are somewhat more likely to support credit facilities for teenagers aged 16 and older (27% vs. 18% and 24% of British and German parents, respectively).

The following sets of statements were found to be most popular with parents in each of the three countries (% of positive responses in the respective country sample).

Germany:

  • children should be encouraged to go shopping for the family on their own — 91%;
  • parents and children should agree, in advance, what items pocket money should cover  90%;
  • children should be encouraged to save some of the money they receive as a gift  84%.

U.K.:

  • children should be encouraged to save part of their wages from a part-time job  90%;
  • children should be encouraged to have a part-time job before they finish school  88%;
  • children should be encouraged to save some of the money they receive as a gift  81%.

Russia:

  • children should be encouraged to go shopping for the family on their own  71%;
  • parents and children should agree, in advance, what items pocket money should cover  65%;
  • children should be encouraged to make donations, from their own money, to charity  59%.

Money Requires Responsibility

Using factor analysis, the researchers identified the underlying principles of parental policies concerning pocket money.

First, children should receive pocket money.

Second, rewards should follow certain rules. Household work, academic success and special occasions are seen as valid reasons for rewarding children with cash.

Third, parents should educate their children about saving the money received.

Fourth, children should have some autonomy in handling money, e.g. go shopping on their own, take part-time jobs and use credit cards.

Adults need to explain to teenagers that money means responsibility. Children and parents should agree in advance on the kinds of items pocket money should cover, and children need to learn about saving and making donations. According to the researchers, "Children are raised to be responsible in their adult life about using their money and sharing it, where appropriate, with others, including their parents."

Children Can Earn Cash at Home

According to Anna Varga, expert in family psychology and Associate Professor of the HSE Faculty of Social Sciences School of Psychology, children can make money at home by performing certain jobs, such as cleaning or plumbing, which could otherwise be outsourced to hired help. This arrangement might work well for families who believe that earning a fair wage for what you do is the best way of making money. While some people would dismiss this approach as cynical and argue that children should help their families in good faith without expecting any reward, Varga finds such arguments controversial and naive. Admittedly, many parents would love to see their children take out the garbage with happy enthusiasm, but realistically, few can expect it. "When I argue for paying children to do household chores I do not mean they should be paid for doing their part of spring cleaning together with the entire family," Varga explains. "What I mean are extra services, such as making mum's bed, polishing dad's shoes or painting the fence." The deadlines and rewards should be discussed beforehand to make sure the child understands the commitment.

According to Varga, paying children for academic success can be a good idea. "Some parents are in favour of big rewards for big achievements, such as promising to take the child, say, to a medieval festival on the Island of Gotland in exchange for top grades throughout the school year," says Varga. "However, not all children have the ability or persistence to aim so high, and parents are better off keeping both their expectations and rewards realistic," the expert concludes.

September 01, 2016