Everyone knows that kids are expensive. Every year, the US Department of Agriculture publishes some high number, like $222,360, and says this is the cost to raise a child to age 18. This doesn’t even include college. No wonder, in the recession, the US birth rate has fallen quite a bit in just 2 years.
But what’s interesting is that the USDA also publishes some figures showing that the marginal cost of additional children falls precipitously. (See page 7 in that report – this is from 2006 but I’m working on getting some updated numbers). According to the 2006 numbers, if you are an average family, having one teenager costs you $14,460 a year. If you have two teens, ages 13 and 16, your costs are $23,000 a year, meaning the second kid added $8,540. But if you have three kids, ages 11, 13, and 16, your annual costs are $25,880. Meaning that last kid only added $2,880. I haven’t found averages for a fourth kid, but from conversations with some mega-families, my impression is that the marginal cost continues to decline.
Why is this? Two reasons. One is that there are economies of scale. A large box of laundry detergent or cereal is less expensive, per ounce, than a smaller one. You spread out the cost of any item of clothing over the multiple kids who will wear it, and likewise amortize cribs, car seats and toys. If you’re paying for childcare, there can also be economies here, too. Hiring a nanny or au pair is obviously expensive, but it’s not a drastically different cost if she’s caring for 1 kid or 3, so the cost per kid falls (with day care, you might get a multiple kid discount, but the cost would fall less — which is why larger 2-income families seldom go this route).
The second reason the cost falls, though, is that as families get larger, parents wind up with different ideas about what is “necessary” for kids. With two kids, you might pay for private piano lessons for each. For 5 kids, this is more complicated. Four sets of ballet lessons, or tennis lessons, will likewise add up, as will private school tuition, and trips anywhere that you can’t drive. Even a $250 plane ticket to Grandma’s becomes a $1500 ordeal for a family with four kids. As for taking a vacation overseas? Even the cost of passports starts to add up.
So I guess the question is whether one thinks any of this matters. With activities, most children won’t become professional musicians, and there may be cheaper ways (like singing in a church choir) to expose them all to music. As for athletics, we’d probably be better off as a society if more people did the “free” individual sports like running or biking that they can do easily as adults, rather than things like lacrosse or baseball, which you probably won’t. But we do live in a competitive world, and it’s human nature to want to give your offspring any advantage you can – which includes things like educational trips and lessons. I’m curious what you all think.
In other 168 Hours news:
- I do a Q&A with Self.com on how (or more, how not) to multitask.
- Working Moms Against Guilt has been mentioning 168 Hours several times over the last month, with a recent post about outsourcing to make life easier.
- Ok, this isn’t really 168 Hours news. But if you subscribe to the New Yorker, Tina Fey has a hilarious article that delves into, among other things, why she hates being asked how she “juggles it all.”