Abstract: This chapter explains the basis for a formal definition of child costs, describes some of the conceptual and practical problems with this definition, and discusses recent estimates of child costs. There have been two principal reasons for analytic work on the costs of children. The first was the need to adjust household incomes for differences in the number and ages of family members to compare living standards across households of different composition. The second was an attempt to understand why, as average income rose, the average number of children per family did not increase as economic theory suggests, but actually fell. To adjust income for family size, economists developed what are called equivalence scales. Such scales specify the factor by which the income of a family of a particular size should be multiplied to make it equivalent to the income of other types of families. A principal way for parents to improve the quality of their children is to invest in their children's education. Children cost more to educated parents because raising children is a time-intensive activity; the more educated a parent, the greater the opportunity cost of spending time with children rather than working or doing other activities.
Publication Year: 1987
Publication Date: 1987-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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