Raising a child from birth to adulthood comes with many costs, but parents still make the investment. New analysis reveals that the current 40-year high inflation has hiked the costs of childrearing to a whopping $310,000. 

The big question is whether higher costs will deter people from having one or multiple children if inflation persists. Costs are not the sole determining factor. The benefits of motherhood and fatherhood are not only measured in dollars and cents. 

However, understanding that families are spending over $300,000 to raise a child because costs have risen so dramatically illustrates one of the innumerable ways that out-of-control inflation disrupts the lives of regular people. Most disturbingly, inflation forces Americans, especially those with the least means, to make existential decisions.

By the numbers

Researchers at the Brookings Institute analyzed the costs of a married, middle-income couple with two children to raise their younger child born in 2015 through age 17. They determined that the couple would spend $310,605—or an average of $18,271 a year adjusted for inflation. This is a more than 9% increase (up $26,011) from two years ago.

Thanks to inflation on the common market basket of goods such as those we highlight in the IWF monthly Inflation tracker, costs on a range of expenses from housing and clothing to food and hobbies are up significantly over the past year.

For example:

  • Daycare fees +3.2%
  • Elementary & high school fees +3.1%
  • Kids shoes +7.7%
  • Boys apparel +4.8%
  • Girls apparel +1.8%
  • Baby apparel +8.2%
  • Sports equipment +6%
  • Toys +6.4%
  • Musical instruments +5.9%
  • Education books +3.1%
  • Eyeglasses +2.3%

The impact of inflation

Inflation rose 8.5% in July from a year prior. However, some expenses rose much faster.

Food at home rose +13.1% and gasoline rose +44%. Gas bills are up +30.5% and shelter is up +5.7%.

Inflation is not just rising fast, but it is outpacing earnings causing inflation-adjusted earnings (also known as real wages) to fall by -3.6%.

American families are being forced to spend more just to maintain the same quality of life as they had a year ago. With savings depleted and credit card debt rising, inflation is forcing consumers to make decisions on how to make their dollars stretch.

Some families are trading down, opting to shop at discount stores, or purchasing off-brands rather than name brands. Some are cutting out discretionary spending on non-essential expenses such as leisure activities, travel, and hobbies. 

For low-income families, who already shopped at discount stores and had little room for leisure, their choices are far more stark.

We ask people to send us their inflation stories and here are some of the hard choices they are making:

Denise E. – My husband and I are on disability between gas prices and trying to make sure rent is paid along with the utilities along with my husband’s meds. We are dependent on what we get in food stamps and food banks… We can’t use our car 2 weeks out of the month because we can’t afford the gas.

Ann B. – We are seniors and live on a fixed income! It is hard to buy food, gas, and the many other expenses that come with inflation! I feel sorry for the low-income and middle class during this time! 

Carole A. – I am a substitute teacher and I do a lot of driving around the Detroit Metro area. Gas prices have gone up more than 50 cents a gallon for my little diesel vehicle. Substitute teachers don’t make a whole lot of money, so this really hurts my budget.

The childbearing choice

Isabel Sawhill, a senior fellow at Brookings, told the Wall Street Journal in an interview: “A lot of people are going to think twice before they have either a first child or a subsequent child because everything is costing more. You also may feel like you have to work more.”    

To Axios, Sawhill expounded further:

It’s useful to remind people how much it’s going to cost to raise a child. It’s not exactly trivial.

And [parents] are going to either have to work harder or make other sacrifices in terms of what they consume.

The decision to have a child is a fundamental one. Families are the bedrock of societies. They form a foundation for children and instill in them a sense of worth, value, morality, and worldview.

The family planning process for many individuals and couples includes with the question of affordability: Can we afford a(another) child?

The financial costs of having a child can influence the timing of having children, the number of children to have, where to live, whether to purchase a home before or after kids, other lifestyle choices, and childcare. However, costs are weighed against benefits that are not so easy to quantify but are still powerful.

Bottom Line

On balance, I don’t think the cost will be the biggest determinant of having a child even if it is a factor. People derive benefits from children that outweigh the rising costs and you cannot put a price tag on that.