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
|