Families living in the urban Northeast tend to have the highest child-rearing expenses, followed by those in the urban West and the urban Midwest. Those living in the urban South and rural areas face the lowest costs.
The estimate also includes the cost of transportation, child care, education, food, clothing, health care and miscellaneous expenses.
The USDA has issued the report every year since 1960, when it estimated the cost of raising a child was just over $25,000 for middle-income families. That would be $191,720 today when adjusted for inflation.
Housing was also the largest expense in raising a child back in 1960. But the cost of child care for young children — negligible 50 years ago — is now the second largest expense as more moms work outside the home.
Children are an economic investment for the community since they will be future wage-earners and taxpayers, but for parents those benefits are pretty diffuse. Rather, children are a social and psychological investment, and as this reason for having children becomes more prominent, the amount we spend on our children seems to go up. This feeds into the idea of the "economics of happiness" put forward by Richard Easterlin, Professor of Economics at the University of Southern California, and a Past President of the Population Association of America.
Most people could increase their happiness by devoting less time to making money, and more to nonpecuniary goals such as family life and health.
Let's drink to that here on Father's Day!