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A new estimate from the Brookings Institution finds it costs over $300,000 to raise a kid in the US.
The estimate reflects inflation’s impact on the cost of everything from food to gas to housing.
The hefty price tag could discourage even more Americans from having kids.
Anyone who’s been to the grocery store or gas pump recently can attest to the fact that prices are steep. It means parents who already lack access to federal paid leave or sick days are also seeing a key piece of their budgets ballooning: The cost of raising their kids.
A new estimate from the Brookings Institution, first calculated for the Wall Street Journal, finds that a married, middle-income couple with two children would have to fork over $300,000 just to raise a kid born in 2015 through their high school years.
It’s just one of the overlapping crises facing young Americans today, and could push them even further from the decision to have children.
The $310,605 price tag is built off of the US Department of Agriculture’s estimate for child-rearing costs, according to Isabel Sawhill, a senior fellow in economic studies at the Brookings Institution. In 2017, USDA estimated that the cost of raising a child born in 2015 — which accounts for housing, utilities, food, transportation, clothing, healthcare, education, and miscellaneous expenses like haircuts, sports equipment, and magazines — would clock in at $233,610.
The cumulative figure is $26,011 greater than it was two years ago, more than 9% from when Brookings last made this calculation.
“It’s a kind of wake up call to parents. It tells them you better think hard before you have a child or another child, because it’s going to have a major impact on your pocketbook,” Sawhill said. “You’re going to have to make trade-offs in terms of what else you spend money on, or on how much you work.”
The reason behind the leap is historically high inflation, which has upended household finances for many Americans over the past year. Sawhill said that inflation estimates were based on what happened the last time inflation was this high in the late 1970’s and early 1980’s. Today, rising costs have eroded savings gains households accrued due to stimulus cash and unemployment benefits early in the pandemic, as well as wage increases workers have angled for.
Although inflation has begun to cool recently, the Brookings researchers found that its impact on the American economy over the past year has already raised the cost of parenthood. Inflation hit a 41-year high earlier this year, causing many households to take on credit card debt and use food banks in order to cope with the rising cost of food, gas, and housing.
“It’s particularly important for lower income families because the cost of raising a child, although it varies with your family income or socioeconomic status, it doesn’t vary that much,” Sawhill said. “The cost of raising a child is going to be a much larger proportion of the budget of a lower income family than of a higher income family.”
The estimates also don’t include a big price tag that can hit families when kids reach adulthood.
“It doesn’t cover the cost of college or of any kind of post-secondary training, because it only goes through age 17,” Sawhill said. “So if you’re a parent and you expect or want your child to go to college, then you really need to add quite a lot more to that estimate.”
Of course, Sawhill noted, it’s unclear if there will be more government support for higher education in a decade, or how tuition might change. Currently, over three million parents have taken on higher-interest student loans to get their children through school.
The study comes as a growing share of Gen Z and millennials choose not to have kids
A rising share of US adults who don’t already have kids don’t expect to ever have them, a Pew Research Center study published in November found.
About 44% of non-parents between the ages of 18 and 49 reported that they weren’t likely to have children in the future, up 7% from 2018. And 74% of parents between the ages of 18 and 50 said that they’re unlikely to have more kids either. More than a quarter of parents younger than 40 who don’t expect to have kids say it’s because of financial reasons.
The explosive interest and discourse around the $300,000 price tag already might further turn younger Americans off from parenthood. As people become more aware of the cost, Sawhill said, “it’s going to have a little bit of a tempering effect on the desire to have children related to affordability” — and may somewhat reduce the fertility rate.
Millennials were already opting out of parenthood, with climate change and more economic uncertainty looming. Instead, some would rather focus on their careers, retain their independence, and avoid high costs — and perhaps become cool aunts instead.
That makes sense in a country where childcare is only getting more expensive, and parents — unlike in every other country in Organization for Economic Cooperation and Development — do not have any mandated paid leave.
At the same time, parents who have already ushered their children through childhood and out of the nest might be experiencing them coming right back. Multigenerational households are on the rise as inflation sends younger adults home. That only highlights the lifelong commitment — and cost — of becoming a parent.
“I’ve often said it’s probably the most important decision you ever make, with the possible exception of who you select as a partner or who you marry. Those are two really huge long-term decisions that are gonna affect your life for quite a while,” Sawhill said. “Between the two, you can divorce a spouse. You can never divorce a child. They’re going to be part of your life forever.”