Economist Richard McKenzie shares the conclusion from his survey of ~2,500 orphanage alumni all over the United States:
Orphanage alumni have outpaced their counterparts in the general population by a wide margin on almost every economic and social measure, including education, income, and attitude toward life.
The kids turned out more than alright. Great news...?
No! Not if you fancy yourself as a loving parent trying to ensure the best possible future for your chillens. I will explain what I mean in a minute. First, consider the implications:
1. Nurture matters. I had been convinced of the somewhat comforting idea that nature matters much more than nurture -- meaning that beyond the basic essentials of love and care, your job as a parent is mostly over after the point of conception. There is evidence for this view based on studies of twins reared apart, but these studies are with the twins raised in different nuclear families, not one raised in a nuclear family and the other in an orphanage. If there truly is this big of a difference in outcomes between the general population and orphans (who, if we can bypass political correctness for a moment, are often at a disadvantage genetically speaking) nurture matters much more than I previously thought.
2. Nurture matters in a way that opposes nature. I think one of the main reasons orphanages are unpopular is because they seem ... "unnatural". No species that I am aware of raises their young in anything resembling a group home. All mothers, particularly the mammalian variety, possess the potential for incredible maternal wrath, and only the greatest of all fools would dare provoke said wrath by saying to the mother "here, let me escort your precious cargo away from you, to a home far away, where your children will be raised by a loving stranger along with 35 other random kids."
3. Nurture matters, but parents still don't. According to McKenzie, kids' closest bonds in an orphanage are not with the adults but with the other kids. In a sense, they raise each other. It is not clear why orphanages have better outcomes (you could hypothesize that it's the social training that comes with a high number of kids, or the added responsibility, or the knowledge/skills of the child psychologists), but it seems clear the benefits are not being driven by superior parental attention.
4. Orphanages strictly dominate nuclear families. Well, not always. Certainly some parents do better than some orphanages. But on average a child in an orphanage can be raised both with substantially lower costs and substantially higher benefits(!). Parenting, then, is woefully inefficient!
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Before I get into the moral problem, I should note that, while applying logic and reasoning to moral quandaries is fun, it is of little practical use because our morality is guided by our emotions and our unconscious mind, not our logic.
The moral dilemma:
Take it as given that raising a child in a traditional family has both higher costs and lower benefits than raising a child by some other method, like an orphanage. Are you then morally obligated to give up your tots? Is your own selfish desire to raise a child a good enough reason to deny a human being better outcomes?
On the one hand, people -- including parents -- all have their own genetic advantages and disadvantages and it would be mighty Hitler-esque to deny anyone for these reasons the right to reproduce or the right to parent.
Counterpoint (yes, I'm arguing with myself): Settle down, dude. Don't invoke Hitler and eugenics for no reason. We are talking about morality on an individual level, not a policy level. If one knowingly, deliberately denies a human being better outcomes for selfish reasons, that's wrong, isn't it? Just as it would be wrong to refuse to read to your kids or hug them, so it would be wrong to deny them of being raised in a setting with a higher probability of better outcomes.
Counterpoint to counterpoint: You have to consider the kids' interests too. Very few kids are going to want to leave their family even if you tell them they are likely to be happier and richer when they grow up.
Counterpoint x3: Sure, most kids won't beg for an orphanage just like they won't beg for vegetables. As we've established, nurture matters in ways that oppose nature. It's an evolutionary fluke. There's no reason to blindly follow our antiquated genetic program when we know better outcomes follow when we oppose our evolutionary instincts.
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My tentative conclusion is that, from a utilitarian point of view, parents should send their kids to an orphanage (assuming orphanages do have a higher probability of better outcomes), but that does not mean I would ever consider doing so with my own (future) tots.
(This moral dilemma, by the way, is quite similar to that of genetic engineering.)
