It cost $25,299 to raise a child from birth to age 18 in 1960. The amount rose to $226,920 last year. This may be one of the many reasons Americans are having fewer children these days.
Adjusted for inflation, the 1960 sum equals about $192,497 compared to $235,996 in 2010, about a 22% increase. Neither number paints a complete picture. Median household income rose 25% between 1960 and 2010. The cost of raising a child is, in comparison to income over the 50-year period, up very modestly.
Because the data was not done on a national basis until 2010, we were advised by the United States Department of Agriculture, which has issued the report since 1960, to use the North Central/Midwest region as a proxy for the national average.
24/7 Wall St. looked at the USDA reports by decade from 1960 to 2010, and calculated the percent change between each period. These numbers where then adjusted for inflation in order to find where the largest increases in price occurred in real dollars. Finally, we considered the individual components of child rearing costs in order to illustrate and compare real world changes in expense. These costs are: (1) Clothing; (2) Child care and Education; (3) Housing; (4) Food; (5) Transportation; and (6) Miscellaneous expense.
The cost of transporting a child has been stable because gas prices have basically followed inflation. The cost of housing rose modestly, but the effect of the real estate price collapse almost certainly mitigated any huge increase in this over the 50 year period. According to the USDA, that leaves two major components of child rearing costs, health care and (2) child care and education.
Click Image For Larger Graph Of Change in Expenses For Raising Child (1960-2010)
The cost of health care has soared. The cost of medical care has gone up 136% since 1960 even when adjusted for inflation – from $8,100 in 1960 to $19,150 in 2010. Worse still, these numbers do not tell a complete story. Treating a sick child can be very expensive. High-tech medical advances have -while improving the quality of care – caused medical expenses to go through the roof. According a 2007 Congressional Budget Office report “about half of all growth in health care spending in the past several decades was associated with changes in medical care made possible by advances in technology.”
Child care and education have changed dramatically. This category includes day care, private school tuition, and, once again, the cost of technology. PCs were not available in 1960. Many children and young adults have them today.
Few women worked outside the home in 1960. Today, dual income families are common. Child care has become among the most expensive parts of raising a child, particularly in a household where both parents are employed full-time. Most children did not attend private schools in 1960. Nearly every child attended public schools then.
The costs are related much more to how society treats children particularly medically and in terms of their use of technology which was brought on by the advent of the PC. Definitions of what makes a child healthy and advances in the ability to process and use information and entertainment are where the sea changes in child rearing costs have occurred.