WASHINGTON, Jan. 9, 2017 – If you are lucky enough to have started a family in recent years, be advised that providing for your child through his or her high school days may be a challenge.
That’s apparent from USDA’s latest “Cost of Raising a Child” report, which estimates that for a child born in 2015, a middle-income married couple will spend $233,610 (in 2015 dollars) on child-rearing expenses until the child turns 18. That comes out to around $13,000 a year. Families with lower incomes are expected to spend almost $175,000 while families with higher incomes may be spending just over $372,000, according to the report, developed by economists at USDA's Center for Nutrition Policy and Promotion (CNPP).
"As the economy continues to improve, USDA is committed to supporting the nutrition and health of individuals and families through our research and programs," Kevin Concannon, USDA’s under secretary for Food, Nutrition and Consumer Services, said in a release. "This report, which we have produced for 55 years, gives families a greater awareness of the expenses they are likely to face, and serves as a valuable tool for financial planning and educational programs, as well as courts and state governments."
For middle-income married couple families, the annual report shows that housing (29 percent) and food (18 percent) account for the largest share of child-rearing expenses, followed by childcare/education (16 percent), transportation (15 percent), and health care (9 percent). Clothing was the smallest expense, at 6 percent, and other miscellaneous child-rearing necessities from birth to age 18 accounted for 7 percent. The report does not include costs related to pregnancy or any college expenses.
"When CNPP first issued this report in 1960, housing and food were the two highest expenses, just as they are today," said CNPP Executive Director Angie Tagtow. "But while housing costs have increased over time, changes in American agriculture have resulted in lower food costs, and family food budgets now represent a lower percentage of household income.” Tagtow says families who wish to lower their food costs even more should check out ChooseMyPlante.gov.
The report says costs were highest in the urban areas of the Northeast, West, and South, while lowest in the urban Midwest and rural areas, and that much of the regional variation in expenses was related to housing. Differences in child care and education expenses also contributed to regional variation. Overall, child-rearing expenses in rural areas were 24 percent lower than those in the region with the highest expenses, the urban Northeast.
CNPP economist Mark Lino said it’s important to note that child-rearing costs varied greatly depending on the number and ages of children in a household. As family size increases, costs per child generally decrease.
"There are significant economies of scale, with regards to children, sometimes referred to as the 'cheaper by the dozen effect.' As families increase in size, children may share a bedroom, clothing and toys can be reused, and food can be purchased in larger, more economical packages." Lino said.
Thus, compared to a child in a two-child family, families with one child spend 27 percent more on the only child and families with three or more children spend 24 percent less on each child.
CNPP economists used data from the latest Consumer Expenditure Survey to come up with their estimates. The CNPP website also offers an interactive Cost of Raising a Child Calculator that can be used to view costs associated with different geographic locations, income levels and family sizes. For the purposes of the report, a middle-income family is defined as the middle third of the income distribution for a two-parent family with children.
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