The Underestimated “Price of Parenting”

The private cost of raising children in the United States is at least twice as high as recent estimates suggest. 

The price of something is not a measure of its worth, just what you have to pay in order to get it—and in some cases—take care of it. No one would argue that cost is the only factor driving the birth rate down in the United States. but it is surely one factor, if only because potential parents worry about their ability to do a good job raising their kids. 

Putting an accurate number on the true cost of parenting makes current federal policies such as “baby bonds”—one-time $1,000 deposits for every newborn in the United States—seem like small drops in a very big bucket.  

The word “parent,” in this context, denotes a long-term commitment to the personal care of a child, including financial support.  Yet even though academic discourse often refers to “parental investments in children,” we pay remarkably little attention to how these “investments” should be defined or what they amount to. 

In the United States, a regular Consumer Expenditure Survey makes it possible to compare what parents spend but omits consideration of costs that don’t take the form of explicit monetary outlays, such as time costs—what someone could have earned and the leisure time they might have enjoyed if unencumbered by care responsibilities. 

Between 1995 and 2015, the U.S. Department of Agriculture (USDA) used data from the Consumer Expenditure Survey to issue annual reports on parental expenditures on children up to age 18, for low- and middle-income families with specific characteristics such as number of children. 

Reports of spending on child-specific items like toys and school supplies were combined with estimates of the impact of children on household expenditures like housing and food costs. The resulting averages conceal big differences across income categories and are most relevant for families we think of as the middle class (other research confirms the rather obvious finding that rich families spend far more on their children than others do).

In 2022, economists at the Brookings Institution took the USDA estimates for children in two-parent married middle-income families with two children in which the youngest child was born in 2015 and applied a realistic estimate of the rate of inflation to project an estimate of $310,605 for total parental expenses up to age 18 for a child born in 2015. 

The Wall Street Journal called attention to this number in a recent article on the “price of parenthood.” Lending Tree, a financial institution, has provided more recent estimates, although they don’t specify their methodology. The number they come up with for parental expenditures on a child up to age 18 is an overall average of $297,674 in 2025, which is probably lower than the Brookings Institution estimates because it is not limited to a specific family type. 

Brace yourself for numbers that are even more eye-popping: Both the USDA and Lending Tree underestimate money expenditures on children because they ignore the costs of bringing a baby into the world and then preparing children to earn a decent living. Parents really need good health insurance, because the average cost of pregnancy, birth, and post-partum care in the United States in 2018–2020 was about $18,865. 

What about the physical effort and health risks of carrying a baby to term? Market logic suggests asking what parents must spend in the United States to find and pay a surrogate if they need one. A recent article in the Wall Street Journal reports typical compensation of  $50,000, not counting the additional fees of $25,000 to $35,000 charged by a surrogacy agency. (According to the same article, about 10,000 embryos were transferred to surrogates in 2022). 

Willing and able to send your high school graduate to college? Average family spending on undergraduate education during the 2024–2025 academic year (on top of financial aid and state subsidies) was $30,837. 

The biggest omission from estimates of the price of parenting, however, is the monetary value of parental time. The Panel Survey of Income Dynamics reports the hours of unpaid care and supervision parents devote to children in different age groups.  In a journal article utilizing this data for the 2017–2019 period, my coauthor Leila Gautham and I multiplied estimates of hours parents spent on childcare times state-level minimum wages to derive what is  known as a “replacement cost” estimate for average households—basically the minimum amount that parents would have to pay for someone to take their place. In order to make our results consistent with the USDA estimates, we focused on married middle-income households with two children.  

We found that the value of unpaid time devoted to younger children ages 0-2 was twice as high as the direct money expenditures, and almost the same as expenditures for children ages 3-5. Once children enter school, the relative importance of the direct money expenditures increases, but it doesn’t exceed the imputed value of unpaid work time until children reach age 15. As children grow, they learn to take care of themselves and require less time—but more money—from their parents. 

A back-of-the-envelope calculation that takes the replacement costs of time into account more than doubles the parental price tag for one child from birth to age 18 to over $600,000.

And this number doesn’t even take into account the monetary value of earnings foregone mostly by mothers as a result of care responsibilities—for many households, this amount is greater than the “replacement cost.” 

Our research also showed that higher-income households were able to reduce their childcare time by purchasing childcare services that were largely out of reach  for others. Meanwhile, the price of childcare services is going up and up, pricing many families out of the market. This is another story, but one that helps explain one of the most interesting results of Lending Tree’s research—that 75% of the surveyed parents reported that having and raising children has been “far more expensive than expected.” 

It's especially expensive for mothers, who face a pretty high risk that fathers won’t put in their fair share of either money or time—the topic of another post to come.