The Fraser Institute



The Fraser Institute

August 22, 2013 06:32 ET

The Fraser Institute: Raising a Child Costs Substantially Less Than Claimed by Many Popular Reports

TORONTO, ONTARIO--(Marketwired - Aug. 22, 2013) - As many parents prepare to face the annual bill from back-to-school shopping, a new study published by the Fraser Institute finds the cost of raising children is much lower than many commonly used estimates.

The paper by Christopher Sarlo, Fraser Institute senior fellow and economics professor at Nipissing University, reviews prevailing academic estimates of the cost of children as well as the popular estimates reported in Canadian media. It concludes that these estimates use flawed methods and questionable assumptions to arrive at an average cost in excess of $10,000 per child, per year.

"While parents certainly could spend $10,000 and more on their children, these estimates simply do not reflect what parents, especially lower income parents, need to spend towards the healthy development of their child," Sarlo said.

"These cost estimates have a distinct middle-class bias and send a clear message to low-income families that they really cannot afford children. Yet there are millions of Canadian parents, including countless immigrants, who over the past several decades have successfully raised happy, healthy, and well-educated children on a fraction of the cost."

In The Cost of Raising Children, Sarlo measures the costs of raising a child at a socially acceptable standard of living using a budget-based approach. Citing information from government and social agency sources (including Health Canada's 'Nutritious Food Basket'), he finds that a starting point for the cost of raising children in Canada today is about $3,000 to $4,500 per year depending on the age of the child. Parents may spend more than that depending on their income, parenting style, level of economic security, marital status, and other financial obligations.

Additionally, Sarlo notes that the attempt to measure the cost of raising children is laden with political implications stemming from vested interests that seek to increase entitlement programs for parents.

"The social welfare community, a broad coalition of public service workers, social activists, academics, and many journalists actively lobby the state for more resources for families with children. Their job becomes easier if the public believes that raising children is an expensive proposition beyond many people's means," Sarlo said.

"Our budget-based assessment reveals that child costs reported in the popular press tend to be substantially overstated."

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org.

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