The Exodus Narrative and the Four Children

Exegetical Approaches

The Wise Child: A Righteous Nation

The Israelites were righteous monotheists who had maintained a unique identity throughout their sojourn in Egypt.  They were eager to leave Egypt and follow Moshe, their spiritual leader.

Purpose of the Exile – Accordingly, the exile was aimed at preventing the assimilation of Yaakov's descendants in Canaan.  In Egypt, where the inhabitants were xenophobic and would not even eat with the Hebrews, let alone marry them, the chances of assimilation were much lower.  Living as a secluded minority in exile would allow the family to grow into a nation with its own unique identity. See Sforno and R. Hirsch in Purposes of the Egyptian Bondage.
Initial settlement in Goshen – Yaakov's family settled in Goshen, specifically, so as to avoid mingling with the Egyptians and to ensure that they did not acculturate into the surrounding society.  See R"A Saba, R. Hirsch, and Netziv  in Why Live in Goshen.
Did the Israelites stay in Goshen? The nation remained in Goshen exclusively, segregated from the rest of the Egyptians, throughout their sojourn.  See the second opinion brought by R. D"Z Hoffmann in Where in Egypt Did the Israelites Live.
Purpose of the bondage – The bondage (as opposed to the exile) had an educational objective. By experiencing slavery themselves, the Children of Israel learned to empathize with and care for the downtrodden and less fortunate members of society. The shared experience of suffering further fostered unity and common identity, strengthening them as a nation.  See Nechama Leibowitz and R. Hirsch in Purposes of the Egyptian Bondage.
Nature of the bondage – This approach can view the experience of slavery as either very harsh, with the people being slaves to both the State and individual Egyptians under severe conditions, or as a somewhat milder experience in which the people worked only in shifts and were able to return home periodically. See Nature of the Bondage.
Who was enslaved? The Levites might have been granted exemption from slavery due to their status as religious leaders and in merit of their great Torah learning.  See Shemot Rabbah in Who was Enslaved in Egypt and Selection of the Priests and Levites.
Why request only a three day journey? The ruse might have been necessary to deceive Paroh, who otherwise would have never agreed to let the nation leave and might have even killed Moshe for the impertinence of his request.  Paroh's refusal for even such a short reprieve from work further served to make transparent just how intransigent he was and why he deserved the punishments he received. See A Three Day Journey.
Were the vessels gifts or loans? Since the Egyptians assumed that the Israelites were not leaving for good, it is likely that they gave the vessels as loans and expected them to be returned.  The Israelites, however, were justified in keeping the objects as partial compensation for years of servitude. See Reparations and Despoiling Egypt.
The Plagues – The plagues were punitive in nature, taking vengeance on the Egyptians for the enslavement.  Since the Israelites were isolated in Goshen, they were spared the effects of the plagues which struck only outside of Goshen's borders.  This position likely would assume that even in the plagues where the text is silent about differentiating between Egypt and Goshen, there is an assumption that the Israelites were not harmed. This strengthened the people's belief in Hashem's justice in punishing the wicked and sparing the innocent. See Purpose of the Plagues and Whom and Where Did the Plagues Strike.
Purpose of the Pesach – This approach might view the Pesach as a thanksgiving offering, given by the joyous nation as they embarked on their journey to freedom and worship of Hashem.  It might have further served as an educational tool for the Egyptians, showing them the worthlessness of their gods. See R. D"Z Hoffmann and R. Bachya respectively in Purpose of the Pesach.
The roundabout route – While the Israelite's religious beliefs were strong, they still needed to develop the physical and mental fortitude necessary to be an independent nation.  Thus, they were not yet ready to enter and conquer the Land of Israel. See Rambam and others in The Roundabout Route and The Road Not Traveled.

The Assimilated Child: An Idolatrous People

The Israelites were idolatrous in Egypt and were reluctant to leave Egypt to follow Moshe and an unknown God.

Initial settlement in Goshen – Yaakov's family settled in Goshen not for its spiritual benefits but for its economic advantages, as it provided good grazing land for their cattle. See Why Live in Goshen.
Did the Israelites stay in Goshen? As the years passed, the Israelites, in their desire to mingle with Egyptian society, moved out of Goshen. Netziv emphasizes how the move promoted the assimilation of the nation, leading them to worship idolatry like their neighbors. See Where in Egypt Did the Israelites Live.
Purpose of the bondage – The enslavement came either as punishment for the nation's idolatry, or as a means to prevent their assimilation from progressing further.1  See Sforno and the Netziv respectively in Purposes of the Egyptian Bondage.
Nature of the bondage – This approach might assume that the enslavement in Egypt constituted state slavery which, while harsh, still allowed people to own their own homes and cattle and maintain intact families. It is possible that they even had positive relationships with some of their Egyptian neighbors. See Nature of the Bondage.
Who was enslaved? It is possible that only the able-bodied were enslaved, while the frail, elderly, women, and children were exempt.  In addition, as Ralbag suggests, it is possible that those who were wealthy enough could pay a monetary tax in lieu of work.  If so, for some groups of people, the conditions in Egypt were not as unlivable as often imagined. See Who was Enslaved in Egypt.
Why request a three day journey? Many of the Israelites would not have been enthusiastic about leaving Egypt. They had no desire to adopt monotheism, did not fully trust Hashem or Moshe, and might not have wanted to forego relations forged with their fellow Egyptians.  If some had positive work conditions, there was not even the incentive of freedom to drive them.  As such, the three day ruse might have been aimed, not at the Egyptians, but at the Israelites themselves who would otherwise have opted to stay put.  See A Three Day Journey.
The Plagues – The plagues had an educational goal, to help the Israelites see Hashem's omnipotence and begin to believe in Him. The stated objective, "בְּזֹאת תֵּדַע כִּי אֲנִי י"י" was aimed at Israel as much as at the Egyptians. See Rashi and Ralbag in Purpose of the Plagues.
Who was affected by the Plagues? It is possible that the Israelites were not spared during the plagues. If the differentiation mentioned in the verses was only geographic in nature, then all Israelites outside of Goshen (a considerable amount) would have been affected.  These nonbelievers might have needed a concrete taste of God's power, and not just a show as it affected others. Moreover, being included taught them to recognize that identifying as Egyptians had its costs. See Whom and Where Did the Plagues Strike.
Purpose of the Pesach – The Pesach rite was meant to highlight the worthlessness of Egyptian gods.  By observing the Egyptian god killed and unable either to defend itself or wreak punishment, the people would learn to reject idolatry. See Ralbag on the Purpose of the Pesach.
Chased out – Hashem ensured that the nation was actively chased out of Egypt, since otherwise they might not have left.  R. Meir Spiegelman2 suggests that this is also the reason why Hashem needed to have a drawn out process of ten plagues.  Had the Plague of the Firstborn been the first plague, Paroh would have capitulated immediately and given permission to the nation to leave, but would not have aggressively kicked them out. Only after ten plagues, did he reach the point that he actively chased out even those Israelites who might have preferred to stay put.3
The roundabout route – The choice of route might have had a dual goal. In the short term, the route was selected, not to avoid a confrontation with the Egyptians, but in order to ensure that they would drown in the Sea. The total destruction of Egypt would guarantee that the Israelites had no reason to return.  In addition, the longer route provided the nation with time to grow in their relationship to Hashem before entering Canaan.  The isolated environs of the wilderness protected the people from outside influences, while the miracles of the Splitting of the Sea, manna, and water, helped instill faith in God. See The Roundabout Route and The Road Not Traveled.

The Simple Child: The Unknowing Masses

The Israelites wavered in their beliefs and desires.  Though they were tired of slavery, they were equally frightened of change and the unknown.

Initial settlement in Goshen – This position might suggest that the family opted to live in Goshen mainly due to its proximity to Yosef and the protection he could afford them.  See Why Live in Goshen.
Did the nation stay in Goshen? The Israelites likely remained mainly in Goshen, out of a mixture of inertia and comfort with the familiar, but with time, Egyptians moved in and they were no longer segregated.
Purpose of the exile and bondage – This position might view the experience as crucial to the formation of the Israelite nation.  Only through shared experiences of suffering could they unite as a people. See Purposes of the Egyptian Bondage.
Nature of the bondage – This position might suggest that the people were slaves to the State and not to individuals. Though the work was hard, they owned their own homes and were not separated from their families. Though they hated the government, they likely had some Egyptian neighbors with whom they maintained cordial relationships and might have even considered friends.
Desire to leave – Though the people desired freedom from slavery, they were much more hesitant about the idea of leaving Egypt.  Change is difficult, and no matter how harsh life was, the unknown is potentially worse. Unsure of where they were going, and what Hashem was to expect of them, the decision to follow Moshe was not automatic.
Why request a three day journey? It is possible that the request for a three day journey was not a ruse at all.  Hashem originally planned a staged redemption, in which the Children of Israel would gradually become accustomed to Hashem's commandments and the concept of freedom.  They would leave for three days to worship God, sense what it was like to be independent and then return.  Only later, when they were religiously and mentally prepared, would they leave for good.4 Alternatively, this position could say, as above, that the request was a ruse intended to deceive the Israelites who otherwise might not have left.  See R. Bachya and Ramban in A Three Day Journey.
Borrowing of vessels – As the initial plan was really to return, it is likely that the Israelites had every intention of giving back the borrowed items. When the Egyptians attacked on Yam Suf, they were the ones who forfeited their claim to the vessels.  See R"Y Bekhor Shor in Reparations and Despoiling Egypt.
The Plagues – The Plagues served both an educational and utilitarian role.  The Israelites needed  to learn more about Hashem's power to be convinced to follow Him.  Yet, since their ties to Egypt were also related to the comfort afforded by the known and familiar, Hashem needed to ensure that there was nothing in Egypt for which to remain.  The Plagues devastated Egypt, removing any idea that it was "home" or had the potential to provide for anyone.
Who was affected? This position might assert, as does Ibn Ezra, that there was differentiation only in the five plagues where it is explicitly mentioned, and that the Israelites were affected by the other less harmful plagues.  They, as much as the Egyptians, needed to learn from the Plagues, but since they were not particularly sinful and deserving of punishment, they did not unduly suffer.  See Whom and Where Did the Plagues Strike.
Purpose of the Pesach – It is possible that the Pesach rite served a dual role.  The smearing of blood allayed the fears of the masses caused by the Plague of Firstborn and, in so doing, taught them that they were protected by God.  The killing of the lamb, on the other hand, helped them realize the futility of Egyptian gods. See Ibn Kaspi and Ralbag in Purpose of the Pesach.
The roundabout route – As above, the choice of traveling via the Wilderness Route might have had both an immediate and long term goal.  In the short term, the route was selected, not to avoid a confrontation with the Egyptians, but in order to ensure that they would drown in the Sea.5 This would sever the Israelites' remaining bonds of servitude and remove any incentive to return to Egypt.  In addition, however, the longer route bought the nation time before entering and conquering Canaan.  These extra months6 would help them unite as a people, discard their fears and slave mentality, and gain the extra confidence and independence essential to conquer and rule Canaan. See The Roundabout Route and The Road Not Traveled.