A new statistic should be taken into account by Americans who are considering establishing a family: From birth to age 17, raising a kid will cost you around $310,000.
That is in line with a recent study from the Brookings Institution, which looked at the Department of Agriculture’s 2015 estimate for the cost of raising a kid and adjusted the figures for inflation since then.
The data shows that the expense of raising a kid has increased by nearly $26,000 since 2020 due to the faster rate of inflation.
The results are in line with a long-term trend of dropping birthrates; in 2020, there were fewer births in the United States than there had been since 1979.
Advocates have emphasized the absence of family-friendly regulations like paid leave.
The only developed country without one is the United States.
The rejection of the Build Back Better Act derailed the Biden Administration’s efforts to increase child care subsidies and expand the Child Tax Credit.
Isabel Sawhill, a senior associate at Brookings whose research typically focuses on the economic and social concerns surrounding marriage and children, said, “If you are going to have children, you have to acknowledge you have to work more or spend less in some other area.” “You don’t have a free choice.”
Additionally, the research only accounts for expenditures related to raising children up to the age of 17, thus it excludes extra costs encountered by parents who want to send their children to college.
“The $310,000 is merely a beginning if you anticipate your children to go to college,” Sawhill said.
Although dropping birth rates are widespread throughout industrialized countries, including those that provide financial assistance for families, she continued by stating that the growing expense of having children may be influencing some Americans’ choices about whether to establish a family.
Never having had kids?
The Pew Research Center discovered in a 2021 survey that 44% of nonparents between the ages of 18 and 49 aren’t planning to start families, an increase of 7 percentage points from three years earlier.
At the same time, more Americans without children are claiming they will never have children.
What is evident is that given the high cost of child care, families are having to make decisions about what to finance, including whether one parent should remain at home with the kids.
The Department of Agriculture’s data shows that housing accounts for roughly 29% of parents’ expenses associated with having a kid, followed by food at 18%, child care and education at 16%, and food at 18%.
People in the United States “might adapt by having fewer children, working more, or cutting down on costs, but something has to give here,” Sawhill said.
Sawhill’s research did not break down expenses by category but rather adjusted the USDA’s estimate from 2015, which predicted parents would spend around $234,000 to raise a child, to account for inflation.
Sawhill assumed an inflation rate of 4% for 2021 and subsequent years, reflecting the current high inflation rate and mirroring the average CPI increase from 1980 to 1997, when the country also experienced a period of high prices. From 2015 to 2020, Sawhill used an inflation rate of 2.23%.
Effect of inflation
One parent said that everything is becoming more costly due to the high rate of inflation, including food and housing.
Los Angeles resident Anneisha Williams, 37, a single mother of six, reported that her rent recently increased from $1,600 to $1,730 per month.
In addition to her two jobs, she is also taking on additional freelance work to supplement her income.
She stated, “Rent went up, and gas is still sort of unstable.” I have to offer to clean someone’s home on the side and braid hair in addition to doing my two jobs. It’s quite stressful, Williams said.
Williams, who is engaged with Fight for $15 to promote a law that would give fast-food employees greater authority and rights, said she works as an at-home caregiver and at Jack-in-the-Box.
She emphasized that raising children has costs in addition to expenses, such as lost wages when a child is ill as she does not get sick pay.
She advised those who are thinking about establishing a family to prepare financially.
Take your time, she said, and make sure you are secure and capable of taking care of the kid as well as the costs and other requirements that come with having a child.