The Children of America - Cost Of Raising A Child

Each year the U.S. Department of Agriculture (USDA) provided estimates of annual family expenditures on children from their birth through age seventeen. These estimates were used by states to determine child support guidelines and foster care payments, by courts to determine compensation in personal injury and wrongful death cases, and for public education of anyone considering when or whether to have a child. Estimates are tied to family income. In 2003 the average household in the lowest income group spent 28% of their before-tax annual income on a child, while those in the highest income group spent 14%. In actual dollars, however, the highest income group spent twice the amount spent by the lowest income group. Such studies

TABLE 3.7

Children ages 15–17 years by their labor force status and selected characteristics, March 20021
(In thousands)
			In the labor force
			Total		Employed2		Unemployed
Characteristic	Total	Not in labour force	Number	Percent in the labor force	Full time	Part time	Total	Unemployment rate4
1The universe for this table is children age 15 to 17 years. Only the population 15 and over have labor force data recorded for them in the CPS. Children under age 15, householders, subfamily reference people, their spouses, and those in group quarters are excluded from this table.
2Full-time employment is 35 hours or more of work in the previous week. Part-time employment is less than 35 hours of work in the previous week.
3Data are not shown separately for the American Indian and Alaska Native population because of the small sample size in the Current Population Survey in March 2002.
4The unemployment rate is the percent unemployed of the population in the labor force.
5"MSA" refers to Metropolitan Statistical Area.
Note: Data based on the Annual Demographic Supplement to the March 2002 Current Population Survey.
SOURCE: Jason Fields, "Table 6. Children Age 15–17 Years by Their Labor Force Status and Selected Characteristics, March 2002," in Children's Living Arrangements and Characteristics, March 2002, Current Population Reports, P20-547, U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau, June 2003, http://www.census.gov/prod/2003pubs/p20-547.pdf (accessed July 19, 2004)
Children 15–17 years	11,842	8,853	2,989	25.2	208	2,158	623	20.8
Age of child
15 years old	3,976	3,606	370	9.3	31	245	94	25.4
16 years old	3,988	2,945	1,042	26.1	61	740	241	23.1
17 years old	3,878	2,302	1,576	40.6	116	1,173	287	18.2
Sex of child
Male	6,110	4,638	1,472	24.1	129	1,003	340	23.1
Female	5,732	4,214	1,518	26.5	79	1,156	283	18.6
Race and ethnicity of child3
White	9,298	6,746	2,553	27.5	176	1,906	471	18.4
Non-Hispanic	7,679	5,441	2,237	29.1	115	1,726	396	17.7
Black	1,796	1,490	305	17.0	24	160	121	39.7
Asian and Pacific Islander	570	475	95	16.7	6	74	15	15.8
Hispanic (of any race)	1,730	1,400	330	19.1	67	183	80	24.2
Presence of parents
Two parents	7,864	5,819	2,046	26.0	98	1,597	351	17.2
Mother only	2,714	2,096	618	22.8	41	395	182	29.4
Father only	598	456	142	23.7	11	92	39	27.5
Neither parent	667	482	184	27.6	58	75	51	27.7
Education of parent
Less than high school	1,704	1,352	352	20.7	56	197	99	28.1
High school degree	3,486	2,608	878	25.2	38	635	205	23.3
Some college	3,115	2,256	860	27.6	35	655	170	19.8
Bachelor's degree or more	2,871	2,155	716	24.9	21	597	98	13.7
No parents present	667	482	184	27.6	58	75	51	27.7
Family income
Under $15,000	1,263	1,056	205	16.2	32	101	72	35.1
$15,000 to $29,999	1,705	1,364	341	20.0	17	209	115	33.7
$30,000 to $49,999	2,514	1,881	633	25.2	54	429	150	23.7
$50,000 to $74,999	2,342	1,688	653	27.9	46	477	130	19.9
$75,000 and over	4,019	2,862	1,157	28.8	58	943	156	13.5
Type of residence5
Central city, in MSA	3,183	2,518	665	20.9	64	437	164	24.7
Outside central city, in MSA	6,372	4,657	1,715	26.9	104	1,275	336	19.6
Outside MSA	2,288	1,678	610	26.7	40	447	123	20.2

demonstrated a fact of life for families—no matter what the income bracket, it was expensive to raise a child.

At all income levels, housing was the greatest child-rearing expense. In the average middle-income family, housing accounted for 34% of expenses for a child in 2003. Food was the second-largest expense across all income levels. (See Figure 3.8.)

Children's needs became more expensive as they grew older. At all income levels food, transportation, clothing, and health expenses related to child-rearing increased as the child grew. Figure 3.9 depicts the shifting distribution of annual child-rearing expenses for a middle income, husband-wife family as a child grew from birth through age seventeen. Food became a greater proportion of expense between the ages of six and eleven. Child-care expenses decreased significantly at age six when the child entered school. The hours spent in school reduced the number of hours of costly daycare required for working parents.

FIGURE 3.8

Where the family lived in 2003 influenced the cost of raising a child. Expenses were highest in urban areas of the West and the Northeast, which had the highest housing costs. Average child-rearing expenses were lowest in the urban Midwest and rural areas where housing and overall cost of living were lower. (See Figure 3.10.)

The impact of child-rearing expenses was greater for single-parent families. Table 3.8 compares expenses for average single-parent and husband-wife families with

TABLE 3.8

Family expenditures on a child, by lower income single-parent and husband-wife households, 2003*
Age of child	Single-parent households	Husband-wife households
*Estimates are for the younger child in two-child families in the overall United States.
SOURCE: Mark Lino, "Table 1. Family Expenditures on a Child, by Lower Income Single-Parent and Husband-Wife Households, 2003," in Expenditures on Children by Families, 2003, U.S. Department of Agriculture, Center for Nutrition Policy and Promotion, 2003, http://www.usda.gov/cnpp/FENR/FENRV16N1/fenrv16n1p31.pdf (accessed August 5, 2004)
0–2	$5,700	$6,820
3–5	6,440	6,970
6–8	7,230	7,040
9–11	6,710	6,990
12–14	7,210	7,840
15–17	7,960	7,770
Total (0–17)	$123,750	$130,290

annual before-tax incomes less than $40,700. About 83% of single-parent households and 33% of husband-wife households fell in this income group in the 2003 USDA study Expenditures in Children by Families. Single-parent families, with an average annual income of $17,000, had significantly lower financial resources than husband-wife families who averaged $25,400 per year in income. Yet child-rearing costs did not vary significantly between the two types of families. As a result, child-rearing expenses consumed a greater portion of the annual income of single-parent families.

A college education was often the largest expense faced by parents after children pass age seventeen. Using information from the College Board's Trends in College Pricing 2003, the USDA estimated average total charges for tuition and fees and room and board during the 2003–04 school year were $9,929 at four-year public institutions and $23,443 at four-year private schools.

FIGURE 3.9

FIGURE 3.10