How a lot does it value to boost a baby? An professional has crunched the numbers

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Your assist makes all of the distinction. Learn extra Australians are having fewer kids than ever. At 1.5 infants per lady, the fertility fee is at a document low. Many attribute this to the price of having and elevating kids.

If that is true, it raises questions of intergenerational equity and future planning for governments. What can we do concerning the younger would-be dad and mom who're opting out as a result of it’s just too costly?

The issue with this assumption is that whereas it could really feel true that childbearing should have turn out to be costlier over the a long time, it’s not that easy.

So what do dad and mom must fork out to boost kids? How can we measure it, and are children actually that rather more costly now than they was once?

Crunching the numbers

Calculating the price of elevating children is an advanced beast that raises many questions for lecturers to think about. Is a second youngster cheaper than a primary youngster? Are older kids costlier than youthful kids? Do higher-income households spend extra on kids than lower-income households, and what share of that spending is important in comparison with discretionary?

These are debates within the literature for which there aren’t essentially clear solutions, despite a lot analysis.

Researchers additionally contest whether or not we should always discuss simply the direct value, or if we also needs to think about the oblique prices, such because the influence on hours in paid work or the lack of leisure time for busy dad and mom. We focus right here and in our paper for the Financial Inclusion Advisory Committee on the direct prices.

A technique, and possibly the extra intuitive, is the “funds requirements” strategy. This places a price on the price of a basket of products and companies for a household with and with out kids. The distinction is the price of kids.

<img src="https://static.independent.co.uk/2025/03/13/10/38/child-money-parent-stock-bank-savings.jpeg" srcset="https://static.independent.co.uk/2025/03/13/10/38/child-money-parent-stock-bank-savings.jpeg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2025/03/13/10/38/child-money-parent-stock-bank-savings.jpeg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="Research shows the first-born child costs about 13 per cent of a family’s disposable income a year to raise" class="sc-1mc30lb-0 ggpMaE inline-gallery-btn"/> open picture in gallery

Analysis reveals the first-born youngster prices about 13 per cent of a household’s disposable earnings a yr to boost (Getty) This appears easy, till it’s not. For instance, do you want a fourth bed room for a 3rd youngster? Do you want an even bigger automotive? A bigger fridge? Personal or public faculty? Childcare or at dwelling care? What about hand-me-down garments and toys?

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One other strategy, which is our focus, is a survey-based statistical methodology (or “iso-welfare” in technical phrases) evaluating residing requirements of various households. We ask how far more earnings (or spending) is required to make sure the identical residing customary between a household with kids and a household with out kids.

Residing requirements are measured by what share of whole family earnings or expenditure is spent on primary objects, resembling meals or utilities.

The logic right here is {that a} household that spends a decrease share (on common) on primary items has a better way of life than a household that spends a better share on primary items.

Concerning the writer Ben Phillips is an Affiliate Professor within the POLIS@ANU Centre for Social Coverage Analysis at Australian Nationwide College.

This text was first revealed by The Dialog and is republished beneath a Inventive Commons licence. Learn the unique article.

The most recent high-quality survey on expenditure in Australia is now ten years outdated, so in our newest analysis we’ve taken a brand new strategy. We use monetary stress as a measure of residing requirements as a substitute.

Utilizing Housing Earnings and Labour Dynamics in Australia (HILDA) knowledge, we mannequin monetary stress towards earnings and a spread of different family variables and estimate how a lot further disposable earnings a household with kids wants to keep up the identical residing customary as a pair with out kids. That further earnings is taken into account the price of kids.

Whereas there are a lot of benefits to utilizing this methodology, a serious disadvantage is that it doesn’t offer you an estimate for the way a lot a household must spend, slightly how a lot they do spend. Households could properly spend greater than what they strictly have to.

So, how a lot do households spend on kids?

We estimate households spend about 13% of their disposable earnings on the primary youngster and an additional ten share factors for every youngster after that.

For a working-age couple incomes the standard after-tax earnings (round A$130,000 per yr), that equates to about $17,000 per yr for the primary youngster and round $13,000 per yr for every subsequent youngster.

Meaning to boost the eldest youngster to maturity, the couple would spend about $300,000 over 18 years in as we speak’s {dollars}. Subsequent kids could be about $230,000 every.

<img src="https://static.independent.co.uk/2025/10/03/10/3e1a9e3813f3f72d867ce86a49bc76d6Y29udGVudHNlYXJjaGFwaSwxNzU5NTcwNzY5-2.25320758.jpg" srcset="https://static.independent.co.uk/2025/10/03/10/3e1a9e3813f3f72d867ce86a49bc76d6Y29udGVudHNlYXJjaGFwaSwxNzU5NTcwNzY5-2.25320758.jpg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2025/10/03/10/3e1a9e3813f3f72d867ce86a49bc76d6Y29udGVudHNlYXJjaGFwaSwxNzU5NTcwNzY5-2.25320758.jpg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="Lower income families spend a higher share of their income on children" class="sc-1mc30lb-0 ggpMaE inline-gallery-btn"/> open picture in gallery

Decrease earnings households spend a better share of their earnings on kids (PA) Decrease earnings households spend a better share of their earnings on kids, at round 17% for the primary youngster and 13% for subsequent kids. However these households spend a decrease absolute quantity on kids.

Does the age of the kid change the associated fee? There's uncertainty round this, however our newest analysis signifies that youthful kids and older kids are reasonably costlier than middle-aged (six to 12) kids.

This discovering contrasts with earlier analysis and standard knowledge that older kids are the costliest.

These estimates will not be set in stone. There are other ways to estimate such numbers they usually can differ relying on what definitions you undertake and strategies you employ to analyse the information.

Okay, do children value extra now?

The HILDA dataset has been gathered over a few years, so we are able to examine the price of kids by means of time, albeit not completely.

Single-year samples are comparatively small and topic to error, however that evaluation suggests not so much has modified with the price of kids since 2001.

Our analysis doesn’t present clues as to why fertility charges in Australia have dropped (as they've in most developed nations). Different knowledge, resembling Australian Bureau of Statistics earnings survey and monetary stress knowledge, recommend actual incomes for {couples} with kids have elevated over the long run (though not by a lot, if in any respect, in recent times).

The shortage of proof right here possible factors to different components driving decrease fertility charges. Households could also be delaying having kids to deal with different pursuits, resembling employment or training. It’s additionally extra acceptable for {couples}, and ladies specifically, to decide on to not have kids.

One other doable purpose is individuals might be being deterred by the notion of upper prices, as a substitute of the particular value. Or maybe individuals merely wish to spend their cash elsewhere.

Calculating the price of kids is advanced and imprecise, nevertheless it’s truthful to say the proof doesn’t present that the direct value of youngsters is getting costlier over time. Youthful generations not having children, or fewer children, is probably going associated to many components, however we are able to’t draw affordability down generational strains.