The One Chart That Shows Just How Much It Costs to Raise a Kid
While there is no shortage of reporting on the soaring cost of a college education, Americans should take a step back to examine the broader costs of raising children in America. A recent report by economist Mark Lino that breaks down the cost of parenting today was highlighted in this week's Atlantic. Needless to say, raising a child is costs significantly more now than it did in the past.
The new data indicates that the total expenses required to raise a child have exponentially increased across the U.S. Accounting for inflation, Lino estimates that the average expenditures on a child from birth through age 17 in a middle-income household has increased by at least 23% since 1960. As of 2012, it costs approximately $241,080 to raise a child, which doesn't account for the ever-increasing cost of college.
Resources such as the USDA's "cost of raising a child calculator" attempt to help parents by generating an estimate of the cost of parenting. The calculator takes into account location, lifestyle, budgetary restraints, and child-care. However, as the American family continues to shift in form and function, hypothesizing this cost is becoming increasingly complex.
The following chart outlines the distribution of parental spending on childcare. It indicates that middle class parents are better off now than they were in the past.
A closer look at the distribution shows that cost increases are mostly concentrated in the areas of health and education. The cost of children's more basic needs like food, clothing, and transportation have declined. Harvard research fellow Christopher Carr argues in the Atlantic that the increase in health and education costs reflects advancements in access to high-quality health care services and expensive education, which indicate significant progress of middle class Americans.
But the overall spending figures do not capture information about family life, class, or even details about the distribution of child-raising funds. For example, shifts in American households from single-income to dual-income, along with the rise of single parenting (which has nearly doubled since the 1960s) and the decline of birthrates (63.2 per 1,000 women ages 15 to 44 in 2011) are all underlying factors that contribute to these shifts in spending. The spending also varies widely according to a family's location, such as whether they raise children in urban or rural settings.
One must consider the diversity of social and economic factors that can affect parental spending to understand this trend. For example, the number of full-time working women in America has nearly tripled over the past four decades. This shift has a two-sided effect on child expenditures. On the one hand, having two working parents could cause child care costs to increase. However, a dual-income household improves a family's overall finances, so parents can spend more on their children in general.
Author Mary Beth McCauley writes in the Christian Science Monitor that the newest USDA factors fail to capture the essence of modern parenting, and argues that the estimates seem low. With so many variables at hand, it is undeniable that the cost of a college education is only one of many expenses on the rise. The figures are an important reminder that parenting is an increasingly high expenditure for Americans in the 21st century.