Grade 3-5, 6-8

Work, Earnings, and Economics: “Lyddie” by Katherine Paterson

Updated: March 19 2024,
Author: Charlotte Higler



In reading/watching and discussing Lyddie, the students travel in time to an 1840s textile mill in Lowell, Massachusetts. Lyddie Worthen, the main character, is employed in the mill. She tries in vain to earn and save enough money to reunite her family.

The story begins when a huge bear enters Lyddie’s family’s cabin. This frightening event precipitates the breakup of Lyddie’s family. Her unstable mother and her father leave home, and she and her brother are hired out to help pay off the family’s debts. In response to these events, Lyddie dreams of reuniting her family. To pursue her dream, she takes a job in the cotton mills of Lowell, Massachusettes.

As the students discuss this story, they will learn how Lyddie’s life is affected by circumstances we can describe by modern economic concepts such as scarcity, opportunity cost, incentives, saving, and interest. By visiting Internet sites, they will also learn about child labor practices, the growth of government regulation and labor unions, and other aspects of the world in which Lyddie lived, worked, and dreamed. Finally, they will use mathematical skills to complete an activity in which they calculate income and expenses in a simulated effort to help someone reach financial goals.

After reading/watching the novel, the students will explore economic concepts by discussing answers to questions the lesson poses. The final activity involves a worksheet that calls upon students to assist a character who needs to evaluate his income against his expenditures to determine how he might meet his financial goals.

Learning Objectives


  • Define the economic concepts of scarcity and opportunity cost.
  • Explain how incentives influence the behavior of individuals, in encouraging saving, for example.
  • Explain how interest rates affect savers and borrowers.
  • Explore the emergence and growth of industralization in the United States in the 19th Century.
  • Explain the symbolism of the bear in the novel Lyddie and in financial markets.
  • Appreciate and understand how calculating expenditures against income can help people reach their financial goals.

Resource List


  •  Write these sentences on the board: “Our wants are unlimited. Our resources are scarce.”
  • Explain that this concept is the starting point for the study of a social science called economics.
  • Your students must understand what the term scarcity means from an economic perspective. Here are two simple questions to ask when determining if something is scarce.
    • Would people consume more of this good or service if it were “free?”
    • Could the resources (time, money, land, etc.) used to obtain the item in question be used for something else?
  • Explain that economics provides us with tools we can use to make sound decisions. For example, when we finish high school, should we get a job immediately, or should we continue our education and work training? Or, should we use our allowance money or the money we earn to save for a high-cost item that we may want in the future, like a car or vacation, or should we spend the money now on video games, clothes, or on movie tickets?
    • As we weigh the benefits and costs of alternate choices in such cases, we evaluate the possibilities based on our ideas about what we value. Economists call our evaluation motivators incentives.
  • Ask: Can you think of some decisions you made recently where you had to evaluate or weigh two or more choices? (The teacher may want to provide an example of his/her own dilemmas such as a decision to take a vacation or to save the money to buy a new car, or to take time to vote in the last election or to use the time to grade papers. Students’ responses will vary.)
  • Write the term opportunity cost on the board. Economics teaches us that the value of whWeaveratever we gave up to achieve our first choice must also be counted as part of the value of our first choice. Opportunity cost is the value of our second-best choice. (For example, in the teacher’s decision regarding the vacation or the new car, if the vacation was selected, then the opportunity cost would have been the new car.) Ask the students to identify the opportunity cost of the decisions they mentioned above.
  • Explain to the students that decisions do not always involve spending money. Ask: What other choice do we have besides spending money? (Money can be saved or invested so that we can use the money in the future.)
  • Ask:
    • How many of you save some of your money?
    • Where do you save your money? (The students may use piggy banks, or give money to parents for safe keeping, or buy savings bonds, or deposit money in special savings accounts, etc.)
  • Ask: What is the advantage of saving money in banks or in purchasing savings bonds? (The money earns interest. Interest is money earned on money saved. When we earn interest, our money grows.)
  • Tell the students they are going to read/watch a novel called Lyddie. It is about a 13 year old girl who lived in the 1840s, during the Industrial Revolution in the United States. At this time, people who used to work in their homes (sewing clothing, for example) had begun to work in factories, and since there were no laws to regulate the conditions under which they worked, their working conditions were very harsh. The main character in this story, Lyddie, works in a cotton mill making cloth fabric for 13 hours a day, six days a week. She and other workers face various health hazards, and they are required to follow very strict rules.
  • Have the students read/wtach Lyddie. Use this Study Guide handout to discuss the novel and to teach the economic concepts.
  • Once the students have read/watched the novel, discuss the following questions.Questions and Answers:
  • In Chapter 1, ‘The Bear,’ what are some of the scarce resources described in Lyddie’s home? Are the things you listed scarce in our homes today?
    (Food. [There is only a pot of oatmeal for dinner.] Warmth. [The only heat is the fireplace.] Security or Safety. [The bear comes through a makeshift door.] Income or savings. [The family is forced to sell the pig. They have to move in with relatives. Lyddie and Charlie have to take jobs.] Yes: The above items are scarce. We budget our income so that we can provide for food, shelter, clothing, etc.)
  • Explain how scarcity of resources influenced the decisions made by members of Lyddie’s family. (Lyddie’s dad went West to search for riches. Lyddie’s mom decided to rent out the farm and the animals to pay off past debts, and to hire out the labor of her two oldest children. Lyddie and Charlie obeyed their mother’s wishes because they had no place to live and because they thought the new arrangements would be temporary.)
  • An incentive is something that encourages or discourages an individual to make one choice over another. There are negative incentives (things we want to avoid) and positive incentives (things we want). Identify negative or positive incentives influencing each of the following decisions.
    • Lyddie’s and Charlie’s decision not to tell their mother about the calf and to sell it themselves and keep the proceeds.
      (This could be considered a positive incentive: to reunite the family.The decision they made was aimed at earning money to help bring about that result.)
    • Lyddie’s and Charlie’s decision to accept the jobs at the mill and the tavern.
      (This could be considered a negative incentive because the children wanted to avoid being homeless.)
    • Lyddie’s decision not to turn Ezekiel Abernathy (Freeman) in as a runaway slave.
      (This decision involves a negative incentive. Lyddie had begun to understand the inherent evil of slavery. She could relate to Ezekiel after her experiences at Culver’s Tavern. Her conscience would not allow her to turn in Ezekiel even for the $100 reward. She wanted to avoid the pangs of a guilty conscience. Avoiding a feeling of guilt thus served as a negative inventive for her decision.)
  • Why was there very little incentive for Lyddie to stay at Culver’s Tavern?
    (At the tavern she was treated very harshly, overworked, and did not receive any pay. The 50 cents a week she earned was sent directly to her mother – when Mrs. Culver remembered. Thus Lyddie has no strong positive reasons to stay.)
  • What were Charlie’s incentives to stay at the Mill?
    (He was treated as a son by the Phinneys. He was sent to school, and he felt he had found a home and parents.)
  • What benefits did Lyddie identify as she made her decision to run away from the Tavern and to take the job in the mills in Lowell?
    (The benefits Lyddie identified were freedom, a much higher wage, and the possibility of reuniting her family.)
  • What were the opportunity costs of going to Lowell?
    (Answers may vary as the students make their own value judgments about what Lyddie’s second-best option might have been. Some possible answers might be the fresh air of the county, moving farther away from her brother, moving farther away from the farm.)
  • According to the novel Lyddie what conditions existed in the Lowell Mills that do Factorynot exist in the workplaces in the United States today?
    (Possible answers: include the 13 hour work day; the fact that the girls had to reside in company houses and pay the company for their room and board; the girls’ free time was not their own; they had curfews and mandatory church attendance; the company mandated clothing regulations; the work environment was unhealthy and dangerous with problems of air quality, disease, dangerous machines, and child labor.)
  • What caused these conditions to improve for workers in the United States?
    (The government passed laws to regulate workplace conditions and child labor. Workers formed unions and demanded better working conditions.)
  • Why did the factory owners keep increasing the speed of the machines while decreasing the quality of the workers’ food?
    (Provide students with this definition of productivity: Productivity is the amount of a good or service that can be produced with a given amount of productive resources: labor (people), natural (things nature supplies), capital (tools and machines). Increases in productivity may increase profits. The mill owners increased the speed of the machines and decreased the quality of the workers’ food to increase productivity and thereby increase their profit.)
  • Describe the economic plan that Lyddie had to reunite her family.
    (Lyddie became proficient in her work, increasing her productivity and her wages. Lyddie spent her money carefully, buying only what she absolutely needed. Lyddie saved the money that she didn’t spend in a bank account.)
  • Name two things that helped Lyddie reach her savings goals.
    (Ezekiel Freeman repaid the $20 loan Lyddie had made to him when helping him obtain his freedom. Freeman also paid Lyddie $30 in interest for a total of $50. The money Lyddie saved in the bank also earned interest. Define interest as money earned on money saved.)
  • At the end of the story, Lyddie must make another choice. What are the two options? What does she choose? What is her opportunity cost in this decision?
    (Lyddie must choose either to marry Luke Stevens or to attend Oberlin College. She chooses to go to Ohio to attend college. The opportunity cost of this decision is that she must postpone her marriage until a later time.)To close this lesson, have the students complete Making Sound Financial Decisions .


Use the attached files Making Sound Financial Decisions worksheet for the conclusion activity. The Teacher’s version provides the answers to the questions.
Note: Written responses given by the students to help Marty achieve his financial goal of purchasing a new iPod will vary. Answers that either increase Marty’s income or reduce his expenditures so that he can achieve his goal will be correct.

Extension Activity

The topic of child labor practices offers many opportunities for studies across the curriculum. Most of the Web sites in the Resource section have lessons and activities that can easily be used to extend this lesson. Here are some suggestions for using these sites:

  1. Use the sites that offer photographs from the period, and have the students create posters or electronic presentations. After students complete their research, have them present reports to the class on the jobs, the industry, and the government regulations or social forces that eventually brought change.
  2. Use the Scholastic Magazine site to have the students work in groups to explore the countries that receive special attention in reports on child labor around the world. How do the economic concepts of scarcity, opportunity cost, and incentives play a role in the lives of the people discussed?
  3. Show the students the film “Oliver.” Discuss the similarities between Lyddie and Charles Dickens’ story.


Although there are several online tests and quizzes for Lyddie this activity provides a short evaluative means to assess how well students have learned the economic content found in this lesson.