The American Interest
Analysis by Walter Russell Mead & Staff
Million Dollar Babies

As anyone with children well knows, raising a child is expensive. What is surprising, however, is just how expensive it truly is. ABC News reports that the US Department of Agriculture has released a report that quantifies the cost of raising a child —from birth to age 18—and the resulting figure is staggering: $234,900.

This is an alarming figure—all the more so because it has risen 3.5 percent in the past year alone. Although some of this increase has been driven by inflation, the main culprits are increasing costs in child care, education, food and especially healthcare, where costs have doubled since 1960.

And this is only the number for basic expenses. College expenses—the biggest single expense associated with children—has not been taken into account. With the average cost of a four-year college coming in at over $100,000 for public schools and nearly $200,000 for private schools, the total cost of raising a child and putting it through college may be something closer to $500,000—half a million. The “average” American family with two children is looking at spending a cool million dollars on their children before they reach adulthood.

Clearly, something has to give. Raising children is one of the most fundamental and rewarding experiences of life, and it should not be necessary to be a millionaire to take part in it. And it is not only individuals who will suffer: Europe and Japan’s well-known demographic crises are partially driven by an unwillingness of married adults to have children, and while America has not yet quite reached this point, it is easy to imagine prospective parents already struggling to make a living choosing to forgo children when they take a look at the bill. There are some European traditions worth emulating, but it’s birth rate is certainly not one of them.

What numbers like these tell us is that our society is profoundly dysfunctional. We have organized ourselves so poorly that the most basic and fundamental thing a human society must do — produce the next generation and prepare it for adulthood — is becoming harder and harder with each passing year.

One way to think more intelligently about social policy: how do we make it easier and cheaper for people to have and raise families? This is going to be partly about the restructuring of higher ed and the school system more broadly, partly about restructuring the concept of work so that parents can more easily and effectively mix child rearing and employment, and partly about more general reforms in fields like housing and health care.

But the war against the young is increasingly making it harder for young couples to start families and to bring them up. America needs to be a great place for families; if we lose that, we lose just about everything.


Published on June 17, 2012 2:00 pm
  • dearieme

    The biggest potential cost for most couples would be the woman giving up employment for years. But that’s not mentioned and so I disbelieve that quarter-of-a-million bucks. Phooey!

    (Caveat: I have no feeling for the US cost of healthcare.)

  • Kis

    “especially healthcare, where costs have doubled since 1960″

    Ah, for the good old days when the treatment for cancer-stricken children was morphine!

    [Mother Superior urges me to clarify that I agree with the gist of the post.]

  • Luke Lea

    Like you say, something has to give:

  • thibaud

    “the main culprits are increasing costs in child care, education, food and especially healthcare, where costs have doubled since 1960…”

    “What numbers like these tell us is that our society is profoundly dysfunctional. ”

    The cognitive dissonance here continues to amaze.

    We spend twice as much per capita on healthcare, with middling-to-worse results, as our peer nations that have universal health insurance – and the TPers wonder why it’s so extraordinarily difficult and expensive to raise a family in America.

    The TPers squirm and look for any explanation other than the obvious one – ah, er, excessive regulation! Taxes! Uncertainty! – but the biggest part of the solution is hidden in plain sight.

    If you want to help working families in this country, then start by

    1) severing the link between employment and health insurance


    2) expanding Medicare to cover everyone so as to lower the cost to families of basic + catastrophic coverage.

    Two-thirds of the US public supports this simple and sensible approach (see the Kaiser Foundation’s poll and the bipartisan Peter Hart/Bill McInturf poll) that would put an end to the Frankenstein kludge of our healthcare non-system.

    Nothing is more important, nothing would have a bigger and more immediate impact, on improving the climate for raising and providing for a family in this country than transitioning to the public option.

    The GOP and the TPers talk a good game about supporting families, but their absurd and maniacal opposition to universal health insurance makes a mockery of their pose.

  • Anthony

    “Raising children is one of the most fundamental and rewarding experiences of life….” The aforementioned begs a societal question WRM – are families with children essential to health of societal organization in all stages of development (leaving aside societal replacement issue)? What is at issue is cultural – valuation of families to societal vibrancy and provision thereto of a tax stream that supports social services. Essentially, you infer both economic and cultural considerations vis-a-vis integral American family formations.

  • Michael Goodfellow

    $234,900/18 = $13,050 per year.

    If this were cash outlay, there’s no way it’s really this high. The average income family in this country could not actually afford to raise their kids.

  • thibaud

    An important factor, probably the most important after secure access to good healthcare, is work-family balance.

    US companies and US capitalism generally are notoriously bad at helping young families to achieve this balance.

    The nordic countries, by contrast, have focused on this, with good results, achieving significantly higher fertility rates than for Europe and (non-hispanic, non-afr-amer) America.

    There’s a solid, thorough cross-national comparison here of four approaches to family policy and fertility: the nordic, anglo-saxon, southern european and east european models. Go to page 64 and look at the fascinating graph on page 65:

    The upshot is that the US is clustered in the lower right hand quadrant, ie very late intervention to support working families, and most of the money being wasted on an underperforming, underclass-heavy educational system.

    The nordic countries intervene very early, providing the bulk of the benefit to working mothers of children under the age of three – and they have better results in terms of reducing poverty, increasing fertility, and ensuring a good environment for raising children successfully.

    From the report:

    “in the nordic countries, support to working mothers seems to be sufficiently prolonged, diversified, and continuous over the course of family life to allow a substantial proportion of women to participate in the
    labor market full-time even during the period of family formation.

    “The work/family balance is initially achieved by major state intervention to provide a complementary mix of generous parental leave payments to secure household
    income for the period directly following a birth. This is followed by a relatively prolonged supply of affordable childcare services and direct income transfers to the family.

    “The widely accepted justification for this high level of support is to achieve the combined objectives of child education, adult autonomy, and gender equity.

    “Households can rely on a diverse set of resources that help to secure their transition into parenthood and into employment. in particular, women are encouraged to find a job and to keep it, even after the birth of children, although the effective tax bill that has to be paid as a counterpart is relatively high.

    “Investments of this kind—the provision of affordable childcare, income support, and secure income during parental leave—may lower poverty rates and raise female employment. Flexible work-time practices also
    contribute to achieving a balance between work and family…”

    /end excerpt

    Note: you can’t fund this without taxing people adequately. We can have a stable and broad middle class, or an hourglass social distribution with a few wealthy yuppies at the top and a massive underclass on the bottom. Take your pick, folks.

  • dr kill

    And here I thought you were only confused about the war on drugs. I wish well-intentioned Proggs such as you would leave my drugs and kids alone.

    There is not one area of American life, that once co-opted by people like you, has not forced people like me to develop a second track capable of providing a satisfactory level of service. Health Care? Security? Education? Transportation? Housing? Food?

    I’m a well-intentioned Progg and I’m here to help?

    Please stop. Help me by getting out of my way.

  • Kis

    Michael@6: To put it another way, the average family could supposedly wind up with an extra half a million dollars by not having children.

  • Wesley

    Mead writes in the article, “restructuring the concept of work so that parents can more easily and effectively mix child rearing and employment.” Married women have been flocking in droves to the workplace for four decades or more. I wonder why our business and political elites haven’t done more to help with the above quoted issue.

  • rkka


    It makes for some interesting social science though. For instance, at the end of ‘Soviet genocide’ in 1991, Latvia had 16 births per 1000 population. It is now just above 8/1000 population.

    Deaths there now exceed births by over 1.5 to 1.

    Capitalism triumphs over life itself!

  • Boritz

    Obviously the government will have to pay for it.

  • Jim.


    Compare the price of healthcare for kids to the price of healthcare for seniors — then come back to us with an intellectually honest assessment of what the major problems really are. (And no, counting daycare as “health care” doesn’t count.)

    Try it — at least it would give you a chance to deviate from your Talking Points.

  • Jim.

    As for the post…

    Honestly, “Progressives” should stay out. They’ve done enough damage as it is. Shrink the giveaway programs to Seniors, stop discouraging women from having children, stop thinking that everything has to be meddled with, stop spreading the nonsense that “everything changes” (when some things like sexual reproduction really don’t), and things will right themselves as what humans have known about being human reasserts itself in a new Renaissance.

    Treating it as “policy” is a mistake. Treating everything as “policy” is the mistake.

    Just back off.

  • Boritz

    When my father was a young man he often supplemented the family’s meager food budget by hunting deer. It was cheap to do this many years ago. Eventually, as the population and regulations grew it became more and more expensive. In later years he lamented that what had once been a poor person’s way of eating had become a rich man’s sport. The price per pound of harvesting a deer now handily exceeds that of the finest cut of beef from the grocer, and the cut of beef I used to buy a few years ago at the grocer for $2.99/lb on sale is now $6.99/lb. (on sale!). Very soon eating beef will be only for the well to do and eventually eating anything will be only for the well to do. Ask a North Korean. Of course cars and kids will be priced out of reach.

  • Jbird

    this explains why I’m always broke

  • Kris


    I’m all for a discussion on how to encourage “family formation”, but almost all sources I can find seem to contradict your claim. The US non-Hispanic White total fertility rate actually seems to be higher than the Nordic ones.

    rkka@11: “Capitalism triumphs over life itself!”

    If you love Latvia, re-impose the Communist dictatorship!

  • phwest

    A big part of the “cost” is a combination of housing and property taxes. These are tricky to estimate, since obviously even without kids you have to spend something on housing, and you can probably get away with spending a lot less than most people actually do. To be honest I’d be more interested in the range of costs, which are likely considerable.

    It is also true that the marginal cost of your first child is considerably higher than the marginal cost of your nth. I wonder how much of the increase in the cost of an “average” child is simply the result of more only children.

  • Elizabeth

    Sorry, but the “cost to raise a child” should be better labelled “how much American families spend on average.”

    Here’s the report:

    For instance, clothing = statistics on how much the average family spends on children’s clothing. Transportation costs = split average transportation costs into family-related travel and work/commute travel; then prorate the family-related travel based on the assumed number of people in the family. Housing = cost of a child is the average cost of an additional bedroom, assuming that children don’t share bedrooms.

    As a result, I find this study quite misleading.

    Here’s what I’d really like to see: statistics on who’s having children, by ethnic group, economic status, and region of the country. Near as I can tell, there are segments of the population for whom the idea of having a child is alien and larger segments for whom that’s a normal part of being an adult (with or without spouse), with no economic calculus involved.

  • Francis W. Porretto

    One facet to this that ought not to be overlooked is the net flow of Americans from rural and semi-rural areas into the cities, where housing is more expensive per square foot and other costs-of-living tend to be higher as well. Those factors help to discourage multi-child families — and as a previous commenter noted, the marginal cost of raising a child decreases with every additional child the family elects to have.

    People generally flow toward the cities in search of economic improvement in their lives. That makes this a more important driver than most would be disposed to believe.

  • CLM

    @Elizabeth. Thank you. You said it better than I could have. One of the other things to remember is that studies like this also have tons of bias front-loaded in to them. Surveys are sent out, people choose to fill them out or not – voluntary response and non-response bias.

    Based on surveys filled out, people are selected to continue with quarterly surveys both on paper and via phone or in person for two years. This is random sampling of an already biased overall sample. It will lead to over and under sampling of various demographics.

    Because this is about spending habits, you will also end up with those who exhibit a “social desirability bias” in how they answer their questions. Sure my kids wear Nikes. I get them at the thrift store, outlet store or whatever, but I’ll put down full price because that’s how much I could have spent.

    I also dislike how they subdivide the results into only three income categories. That is going to skew results.

    The main driver behind costs of raising a child going up? Commodities prices going up because gas and energy prices going up. That will impact housing (utilities), food, transportation and clothing.

  • Patricia

    I no longer take these alarmist “studies” seriously. Their purpose is to discourage people from having children (ala ZPG) or to justify more and more government intervention into families.

    “We” have not organized us poorly; the government has reorganized us poorly.

    As Jim says, just leave us alone.

  • Steve

    The assumption everyone has is that kids come with no unexpected problems, such as dvelopmental disabilities. However, the rate of such problems, if all labels and degrees of severity are lumped together, is about one in six, and so the impact should not be ignored. The cost–to families and to society–of a significantly disabled child is far greater (and not just in financial terms).

  • suburbanbanshee

    This is total [profanity removed].

    The cost of raising a kid is primarily sweat equity, with a few small bumps for doctor bills. Kids don’t eat all that much, they don’t need expensive clothes or shoes, and there are still plenty of K-Marts and Wal-Marts, just like when I was a kid.

    Now daycare really is expensive, both in money and in illnesses picked up in daycare. Which is why most two-parent homes should just have one parent stay home; and why most one-parent families would benefit by either getting relatives to help or teaming up with others in the neighborhood.

  • Abelard Lindsey

    For a contrarian argument, maybe this is the appropriate way to reduce the birthrate on the left side of the bell curve.

  • David F

    I have to admit, when I was planning a family, seeing numbers like this scared me. How would I ever afford it?

    Then I found out that the biggest part was the difference in cost of housing. Since my wife and I had already bought a house suitable for raising a family, that made it seem much less daunting.

    As to how accurate the numbers are… I have to agree on their food numbers, even 6 year olds will make a difference in your food budget, and I shudder to think what they’ll eat as teens. Transport costs I do wonder about – you’d still do quite a bit of non-work driving if you didn’t have kids. However, family-friendly vehicles do cost more.

    It would be interesting to see these numbers split by stay-at-home parent vs two working parents, though. (And supplemented by some attempt to estimate the lost income.)

    Another factor left out of the analysis – taxes. There are deductions for dependent children, and some of the expenses are deductable as well. Would that be the best way to attack the problem? Heck, even something as simple as income splitting for tax purposes would make single-earner families more viable…

  • DJR

    @thibaud I’m with you on severing health care from employers. I’ve always been a little baffled as to why the business community doesn’t make more noise on this issue — wouldn’t it help the bottom line tremendously not to have to deal with all the bureaucracy associated with maintaining these complex systems?

    But you lose me when you propose basically putting everybody on Medicare, i.e., going to a Canadian-style system.

    I was born and raised in Canada, and their system has its pros and cons as the US system does. But other than our current Democratic leadership, who are either disingenuous or uninterested in the cost of Obamacare (“you have to pass the bill to find out what’s in it”), does anybody believe that going to a single-payer system would actually cost *less*? It doesn’t really matter what’s ideal — we’re already insolvent!

    I’ve never understood why a significant tax break incentive to purchase health care couldn’t be the solution, rather than the behemoth that is Obamacare. Provide people with deep incentives to purchase health care. If they refuse the incentives and prefer to rely on government health care/Medicare, then fund the system with the revenues brought in by their refusal to take advantage of the tax break. Tax breaks for Republicans! Safety net for Democrats! Everybody wins!

    I don’t buy the argument that the private sector can’t compete with a public option in health care. Private universities compete with public ones. Those who are willing to pay more for (ostensibly) higher quality make that choice. Perhaps the same dynamic would work in health care — with the crucial element that nobody would be *compelled* to choose one over the other.

  • R.C.

    It’s partially healthcare.

    It’s also bound up in all the things one is supposed to GET for one’s children and SIGN ONE’S CHILDREN UP FOR.

    In fact, health care and coverage falls under that category of Important Things You Must Get For Your Kid. But so do soccer uniforms and band instruments.

    And, of course, if your kid has a modicum of above-average scholarly talent, American public school is typically no place for them to be. (I realize there are exceptions; note I said “typically.”)

    But the prices of the alternatives to public school! Quasi-Homeschooling through a “University Model” school is probably the best balance of academic rigor with great value for your dollar…but it’ll still cost ya’.

    Oh, and as for whether the lesser-earning spouse (these days, often the man) works or not: The price of the child care and of the increased taxation caused by going up a bracket because the lesser-earning spouse works outside the home tend to erase much of the increased income.

    Not all, usually…but a lot of families observe that the benefits of keeping one spouse at home ends up being worth sacrificing that small slice of the lower-income-earner’s salary that they would have had if the lower-income-earner kept working.

    Anyhow, the way it’s supposed to look is this: Most folk should make enough money to allocate 10% (pretax!) for long-term savings, 10% (pretax!) for church and charity, and pay their taxes, and still have enough left to plausibly raise 3 kids (replacement-level demographics sufficient to make up for the folks who never have kids).

    American life is not, to say the least, like that currently!

    I think larger deductions for kids could help. But we can’t afford that until we cut the size of the Federal Government enough not to collapse in a mix of default and hyperinflation by 2035…which is to say, cut the military sector a lot and the entitlements sector by a good 30%.

    So…let’s put the Blue Social Model out of its misery first, and THEN the society will have resources available to do things like, y’know, REPRODUCE.

    (Which, ironically, is the only thing capable of producing the large youthful workforce that would ever rescue the Blue Social Model from insolvency. Funny old thing, life.)

  • R.C.

    RE: Single Payer Government Healthcare:

    The difficulty is that that kind of “reform” is going in the opposite direction from where we need to be.

    I know, it seems like centralizing everything simplifies it. It doesn’t; it only makes bad/ignorant decision-making systemically impossible to work around.

    Look at it this way: A lot of people complain about HMO’s, because in fact HMO’s are quite stupid ideas.

    For the most part they aren’t insurance at all; insurance is a small amount you pay to guarantee a big payout in the event an unlikely event happens.

    But health coverage is largely for doctors’ appointments and counteracting the effects of old age and paying for the medical costs of procreation and the like…and none of THAT is unexpected or unlikely!

    So health “insurance” is mostly not insurance at all; mostly it’s a pre-pay system wherein you pay someone else money for services that you aren’t buying just now but know you’re going to need before long or on a regular basis. It’s not like auto accident insurance; it’s like pre-paying for oil changes.

    Now the really stupid thing about this is they resulting dynamic: Person X pays an HMO in advance. Then, when he needs medical services, he goes to the HMO and…does what, exactly? He begs them to give him back the money he paid them earlier, in the form of paying for the services he needs!

    And their incentive to do so is somewhat mixed: On the one hand, if they get a rep for denying claims, they’ll lose customers. On the other hand if they are too soft, they’ll be giving out a lot of money they currently have in their hands. So if the payment looks like a good way to keep the client HEALTHY and reduce long-term care costs, they pay…but if it looks like an expensive way to make them live longer, leading to more expenses later, the incentive is largely against keeping the customer alive.

    Fortunately the wish of an HMO to have certain customers die early is counterbalanced by their wish for good PR and not getting sued. So their responsiveness to the euthanasia incentives is curtailed.

    Now consider what happens if government becomes your HMO: You get all the same problems: You pay a third party to hold on to your money in the hopes they’ll release it later when you want it used for treatment.

    But now, there is no competition, and little hope of lawsuits. Now, there is nothing to curtail the euthanizing incentives. Nothing to make the government work hard to “keep your business” and provide you great “value for your money.”

    It’s basically a way to create a monopoly HMO. Dumb move.

    No, the best practices would be something like privately-owned HSA’s (Health Savings Accounts, or Medical Savings Accounts if you prefer) combined with catastrophic expense coverage (real “insurance”), wherein the consumer makes their own decisions and shops around and compares the real price of Procedure X between one doctor and another.

    This, helpfully, takes the “middleman with perverse incentives” out of the picture. Being private, the HSA’s are inheritable, and you can loan or give from one person’s HSA to another. You could have government do a kind of “matching” like employers do for 401K’s, means-tested, to help make it easier for the poor to rapidly build up the contents of their account.

    And if you’re worried about older people’s accounts running out before they die, you can make care cheaper for older folks by having the government partially refund health expenses for anyone who’s already outlived the mean life expectancy for people born in their birth year. If they’ve outlived it by 1%, they get a 1% reimbursement; if by 10%, a 10% reimbursement. If the mean life expectancy for folks born in their birth year is 75 and they live to be 150, then God bless ‘em, they’ve outlived the mean by 100% and all their healthcare is on the house from now on.

    But for the normal working stiff, he should have his own medical money saved up and he should pay it directly to his doctor.

    Prices would fall like a rock, bureaucracy would be slashed, and allocation of resources would improve.

  • Walter Sobchak

    I will believe them when I hear about 8 am classes returning to the campuses.

    My kids were at a top tier university for the first decade of this century. It cost pretty close to a half million dollars. I never once heard of any of them being in class at 8 am.

    Administrators: There is some very low hanging fruit.

  • JamesB

    From page 11 of the report: “As previously discussed, child care and education was the only budgetary component for which many households had a zero expenditure and the others had a positive expenditure. The USDA
    estimates include only families with expenditures on this budgetary component. For the middle and highest income groups (for households with the expense), child care and education was the second largest expenditure on a child, accounting for 18 and 23 percent of child-rearing expenses, respectively. For the lowest income group, child care and education accounted for 14 percent of total child-rearing expenses (again, for households with the expense).”

  • thibaud

    @ #27 DJR – I agree that Obamacare is a bad solution that doesn’t address the ral problem, and that major changes to the tax code are an essential part of health care reform.

    The public “option” presumes a private health insurance system that co-exists alongside, say, medicare for all. It would be funded by, as your post seems to anticipate, major changes to the tax code that would raise taxes in some areas (eg eliminating deductability of corporates’ health care expenses) while cutting them in others (eg slashing payroll taxes).

    The net effect of these tax code changes would be to significantly LOWER the marginal cost to US companies of hiring people in the US (as opposed to hiring people in say India, or Ireland, or China.

    At the same time, this would significantly EXPAND the safety net for working families and for would-be entrepreneurs who are now held back from creating new companies and new jobs by the tether to their big company employer that is employment-based health insurance.

    Call it what you will – national health insurance or the “public option”: this is the pro-business, pro-family solution.

    Bizarre beyond belief that the party that presumes to support families and businesses is opposed to this.