Relative to its European peers, the United States spends virtually nothing on benefits for families with children.1 This dearth of family benefits leads to two cruel outcomes: it denies many people the ability to have the families that they want and inflicts financial ruin on many of those who go through with parenthood despite the lack of social support.
The prevalence of financial problems among families with children causes many would-be parents to have fewer children than they would prefer and causes some to forego parenthood altogether. A recent survey found that one-fourth of people between the ages of 20 and 45 had fewer or expected to have fewer children than they wanted.2 The most common reasons were economic: 64 percent said child care is too expensive; 44 percent said they can’t afford more children; and 43 percent said they waited too long because of financial instability.
When people do have children, they often struggle to afford child care, pre-k, and even everyday expenses. The effects of this social neglect are felt most severely by those on the bottom of our society. Twenty-one percent of American children live in relative poverty—a higher percentage than that of any European country.3
Current policy discussions around benefits that help families with children are fractured in strange and unhelpful ways. Ideas to expand child care and pre-k services tend to get grouped in with education policy or stand alone under the heading of “early childhood education and care.”4 Programs that provide public health insurance to children are categorized as healthcare policy.5 Paid leave proposals almost always seek to bundle leave for parents with leave for medical reasons and then wind up classified as women’s policy.6
These issue-area assignments are not wrong in an objective sense, but they create a muddled and rudderless policy framework. A more effective approach would be to bring all these policy ideas under the heading of family benefits and then pitch family benefits as having a simple unified purpose: making parenthood easy and affordable for everyone.
In Section One of this paper, I lay out a general theory that explains why having and raising children is so difficult in a laissez-faire capitalist system. In Section Two, I introduce the Family Fun Pack, a suite of family benefits that solves the problems identified in the first section. These benefits include free child care, free pre-k, free healthcare for children, and a child allowance, among other things.
Progressive candidates looking for a fresh platform would be wise to consider adopting the Family Fun Pack agenda. It is a coherent set of programs that conveys a simple message. These programs, which are common throughout the world, are extremely effective at reducing the burden of parenthood and especially effective at reducing child poverty.
The first problem, which I call the mere addition problem, is that adding children to a family unit increases the amount of resources and time needed by the unit, but our current economic system does nothing to address this need. Similar workers receive the same wages and time off even though some have to pay for diapers and child care while others do not. Because income is paid out to the factors of production without any regard for its final family-level distribution, families with children wind up in dramatically worse financial circumstances than families without children, even when the families are otherwise identical.
The best way to understand the severity of the mere addition problem is through a concrete example with realistic figures. So, imagine two married middle-class couples, the Smiths and the Johnsons. Both families earn $80,000 per year, but the Smiths have a son and a daughter when they are in their mid-20s while the Johnsons never have kids.
According to the latest figures from the usda and the Current Expenditure Survey, the Smiths will spend $233,970 out of their own pockets getting each of their children to age 18.7 That’s $467,940 for both kids. The Johnsons, being childless, will spend $0 over the same period. If both of the Smith’s kids attend a four-year public college, that will cost the family another $116,720, bringing the grand total with college to $584,660 versus the Johnson’s $0.8
Despite working the same middle class jobs, the Smiths are much worse off than the Johnsons. By merely adding two children to their family unit, they find themselves half a million dollars in the hole. This dynamic opens up huge inequalities between families with different numbers of children and causes many lower income families to drown under the financial burden.
In the above example, the Smiths earn $80,000 per year and therefore can probably absorb the extra costs of raising children without going broke. But for lower class families, the story is much more bleak. Retail workers, food service workers, and others with low incomes often find themselves completely crushed by these expenses. Without a robust set of family benefits available to offset child-rearing costs, these families frequently wind up in poverty.
Indeed, because of the mere addition problem, the presence of children is one of the leading causes of poverty in American life. In social statistics, poverty is a function of family income and family size. When children are added to a family, the family’s size increases, but the family’s income does not. This necessarily pulls a family closer to the poverty line and plunges many families below that line.
In 2017, 158 million Americans lived in families with children.9 Over 28 million of those people lived below the poverty line, and that’s even after counting transfer programs like food stamps and the Earned Income Tax Credit.10
If these children did not exist, then obviously there would be no child poverty. More interestingly, if they did not exist, then half of the poor adults who currently live in families with children would no longer be poor.11 That’s right: half of poor adults who live with children are only poor because of the expenses of raising children. It is thus the presence of children in these households that is driving the adults into poverty. Based on this analysis, children directly or indirectly cause 36 percent of all the poverty in America.
Since children increase the amount of resources families need to maintain their standard of living, a society that fails to match that need with public benefits will generally wind up with high levels of interfamily inequality and high levels of child and child-adjacent poverty.
The second problem, which I call the lifecycle income problem, is that peak childbearing years occur in early adulthood when individuals are working entry level jobs and therefore receiving entry level pay. As workers gain experience, they generally receive promotions and raises that increase their incomes, but much of this money comes too late to help with the punctuated costs of raising children. This mismatch between peak earning years and peak childbearing years drives up inequality and poverty in society.
People generally have children in their late 20s and early 30s. The average age of first birth is 26.6 years old.12 The birth rate, i.e. the percent of women who have children in a given year, peaks at 11 percent around age 30.13 The percentage of adults living with children under the age of 5 peaks at 35 percent around age 33.14 The percentage of adults living with children under the age of 18 reaches a high of 66 percent at age 39.15
Yet adults receive their highest levels of income in their 40s and 50s. Median personal earnings peak at age 44; median family income peaks at age 49; and median equivalized family income, i.e. family income adjusted for family size, peaks at age 59.16 The result of this lifecycle income pattern is that family incomes are lowest right around the time people start having children, increase gradually while people are raising kids, and then reach their peak after kids have moved out.