New York () — Rising inflation has made almost everything more expensive. And it has also significantly increased the cost of one of the main budget problems: raising children.
It now costs a middle-income married couple with two children $310,605 to raise their youngest child from birth through high school, according to a recent estimate from the Brookings Institution.
The estimate is based on a 2017 report from the United States Department of Agriculture (USDA). At the time, the agency estimated that it cost a median-income married couple $233,610 to raise a child to age 17. The cost took into account the cost of food, housing and other necessities for a child born in 2015, but notably not the cost of a college education.
Brookings found that current record-breaking inflation has dramatically increased those costs. Brookings first shared the figures with the newspaper The Wall Street Journal.
“It makes people recognize that when you start a family or when you increase the size of your family, you’re going to have to offset it from other budget items,” said Isabel Sawhill, a senior fellow in economic studies at the Brookings Institution who authored the report. study along with Brookings Senior Research Assistant Morgan Welch.
Housing is the biggest expense for families, accounting for almost a third of total parenting expenses. The median home price in July, at $403,800, was up 10.8% from a year ago, marking more than a decade of year-on-year monthly gains. And prices rose across the country, as 80% of US metropolitan areas saw double-digit increases in home prices last quarter.
Food is the second most expensive budget item in raising a child, according to the USDA, accounting for 18% of the total cost in its original calculation. Sawhill noted that his most recent estimate did not adjust the allocation of the costs of the different items.
Last year, food prices rose 13.1%, the largest annual increase since 1979, according to the Bureau of Labor Statistics. Almost all basic necessities are more expensive due to inflation: the price of eggs shot up 38%, chicken 17.6% and milk 15.6%.
Sawhill said the estimate already had to make a big assumption about what inflation will be like in the future. The figure is still based on expenses for a child born in 2015, so Brookings had to estimate the rate of inflation beyond the child’s current age of seven.
When it published its estimates, the USDA had been using a 2% inflation rate as of 2015, but Sawhill assumed 4% in the new estimate by looking at historical trends that emerged after the US emerged from the environment of high inflation rates of the late 1970s.
“In ’79, the Fed slammed on the brakes to bring down what was then double-digit inflation,” Sawhill said. “And it took at least a decade for those numbers to return to normal.”
— ‘s Anna Bahney and Danielle Wiener-Bronner contributed reporting.
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