It’s childcare that makes children so expensive

It’s worth noting that one of the things which makes having children so expensive is that cost of childcare:

The second most expensive period is the toddler years, when parents pay £53,701 on their children from birth to three years old. The bulk of this is childcare costs, and nursery bills can reach £34,250 in those three years…

Earlier generations never really saw it broken out like this. Because the assumption and practice was that the arrival of children meant one parent - usually the mother of course - stayed at home to do said childcare. That leads to costs of course - the loss of the working income that could be gained by not doing the childcare.

We now have the economic liberation of women and that’s good, liberty is a good thing in and of itself.

On the other side of this we have that story of the lady with three children. Who is gaining in childcare costs from the taxpayer more than the total income from the job said paid childcare enables her to go to. Which does seem like a societal loss when measured in those purely cash terms.

We can even take this one stage further. Those old days meant that the decision to have the one child was the grand cash hurdle to overcome for it was the having of the one child that led to the decision to do household, not market, work. Now that we’ve monetised those childcare costs - by making them a market transaction - the hurdle comes later. When the childcare costs for two, or three or more - whatever - rival then overcome the income to be made from market work.

Do note that we’ve no prescription here, not even a comment upon the rightness or wrongness of the policy change. But we have, significantly, changed the incentives about family size. Something that seems worth noting.

Tim Worstall