The cost of children
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Results from "Measuring the Cost of Children: Estimates for Britain"

"This paper constructs estimates of the costs of children in contemporary Britain. The costs are estimated for cases of illustrative families from simulations of lifetime earnings profiles. Costs are considered firstly in terms of forgone earnings, and secondly in terms of net incomes, after taking account of taxes, benefits and pensions. An attempt is also made to account for the costs of purchased childcare and for the costs of children in terms of consumption expenditure." (Hugh Davies & Heather Joshi)

Key results

"Forgone earnings" (aka "lost opportunity costs") are ignored here. They have nothing to do with a child support system.

This is part of Table 3, with my additions (pink rows) to show the costs per week. These are based on a 16-year period of upbringing (the paper says "Rather unrealistically, the children are assumed to fly the nest and fend for themselves on reaching their sixteenth birthday"). But some of the figures quoted appear to be more relevant to a longer period, so the cost of children per week in the table below may be too high (perhaps one-eighth too high).

  1 child 2 children 4 children
Low-skill couple      
Childcare costs £1,000 £0 £0
Consumption costs £76,000 £123,000 £205,000
Total costs £77,000

£123,000

£205,000
Cost per week (assuming 16 years) £92 £147 £246
Cost per child per week (assuming 16 years) £92 £74 £61
Mid-skill couple      
Childcare costs £4,000 £4,000 £0,000
Consumption costs £83,000 £142,000 £233,000
Total costs £87,000 £146,000 £233,000
Cost per week (assuming 16 years) £104 £174 £279
Cost per child per week (assuming 16 years) £104 £87 £70
High-skill couple      
Childcare costs £35,000 £45,000 £39,000
Childcare cost per week (assuming 16 years) £42 £54 £47
Childcare cost per child per week (assuming 16 years) £42 £27 £12
Consumption costs £121,000 £221,000 £360,000
Total costs £156,000 £266,000 £399,000
Cost per week (assuming 16 years) £187 £319 £478
Cost per child per week (assuming 16 years) £187 £159 £119
Mixed-skill couple (man high, woman low)      
Childcare costs £0 £0 £0
Consumption costs £105,000 £188,000 £287,000
Total costs £105,000 £188,000 £287,000
Cost per week (assuming 16 years) £126 £225 £344
Cost per child per week (assuming 16 years) £126 £113 £86

Conclusions

For some reason, the costs per child per week are higher than any other estimate. This may be a mistake on my part, for example if the costs are incurred over (say) 18 years not 16 years.

This suggests that spend on children is related to skills (rather than earnings) - however, these are obviously correlated. It also shows the influence of childcare. Childcare can make the cost per week of a child get very high indeed.

References

(Hugh Davies died in October 2000 of lung cancer)

[1] Measuring the Cost of Children: Estimates for Britain
Hugh Davies
Department of Economics, Birkbeck College, London
Heather Joshi
Centre for Longitudinal Studies, Institute of Education, University of London
December 1998

Page last updated: 5 July, 2004 © Copyright Barry Pearson 2003