1. GCH: Future of Families Economic Issues related to Fertility

2. Economic theories of fertility In the past, two economic reasons for having children were to provide farm labor, and to provide care in old age. In post-agrarian societies, families do not need children to provide farm labor, and financial and government infrastructure provide alternative sources of old-age support. Although kin support is still the main and preferred source of support for elders who need help.

3. Forgone earnings In modern times, a woman’s earning capacity is used as a measure of the value of her time. The combination of increasing costs of children and increasing cost of lost income when parents withdraw from the labor market predict lower fertility rates. 2007, Median Annual Income for Women in the U.S. High school graduate: $30,092 College degree or more: $49,966. Children imply very high costs, both in money and time— particularly mother’s time—over many years.

4. A negative correlation between women’s education or wage rates, and their fertility. As the economic motives for having children decrease, more rests on preferences and values, and less on economic benefits. Children are less of an investment, and more of an expense.

5. Policies and Fertility Childbearing is a long-term intensive commitment. Governments that want to encourage fertility have tried various policies including cash benefits, tax incentives, and subsidies for various resources such as health care or child care. Governments can only influence fertility decisions with very large subsidies, or with credible long-term commitments to support childrearing. Studies of policies designed to increase fertility have shown that the impact is modest, and influences timing of childbearing more than number of children. Policies reducing economic uncertainty in early adulthood—for example, reducing high unemployment—may have stronger pro- natalist effects than subsidizing births or childcare.

6. Expenditures associated with having children (established by USDA) Child-rearing expenses vary considerably by household income level. For a child in a two-child, husband-wife family, annual expenses ranged: from $8,330 to $9,450, on average, (depending on age of the child) for households with before-tax income less than $56,670, from $11,650 to $13,530 for households with before- tax income between $56,670 and $98,120, and from $19,380 to $23,180 for households with before- tax income more than $98,120. Lino, M. (2010). Expenditures on children by families, 2009. U.S. Department of Agriculture, Center for Nutrition Policy and Promotion. Miscellaneous Publication No. 1528-2009.

7. Expense categories As a proportion of total child-rearing expenses, housing accounted for the largest share across income groups, comprising 31 to 35 percent of total expenses on a child in a two-child, husband-wife family. Estimated by the cost of adding a bedroom, at 100 to 150 sq. feet. For families in the middle-income group, child care/education (for those with the expense) and food were the next largest average expenditures accounting for 17 and 16 percent of child-rearing expenses, respectively.

8. Annual expenditures on children generally increased with age of the child. This fact was the same for both husband-wife and single-parent families. Overall annual child-rearing expenses were highest for husband-wife families in the urban Northeast, followed by families in the urban West and urban Midwest; families in the urban South and rural areas had the lowest child-rearing expenses.

9. Compared with expenditures on each child in a two- child, husband-wife family, expenditures by husband- wife households with one child average 25 percent more on the single child and expenditures by households with three or more children average 22 percent less on each child. Child-rearing expense patterns of single-parent households with a before-tax income less than $56,670 were 7 percent lower than those of husband-wife households in the same income group. Most single- parent households were in this income group (compared with about one-third of husband-wife families).

10. Expenditures for major budgetary components estimated in this study consisted of direct parental expenses made on children through age 17. These expenditures exclude college costs and other parental expenses on children after age 17. In addition, expenditures on children made by people outside the household and by the government are not included. Indirect costs involved in child rearing by parents (time costs and foregone earnings and career opportunities) are also not included in the estimates.

11. College Annual average (enrollment-weighted) tuition and fees were $7,020 at 4-year public colleges (in-State tuition) $26,273 at 4-year private (non-profit) colleges; Annual room and board was $8,193 at 4-year public colleges and $9,363 at 4-year private colleges. For 2-year colleges in 2009-2010, annual average tuition and fees were $2,544 at public colleges.