Sunday, September 30, 2007

Sunday dollars+sense: The dollar cost of having a child

Intending parents everywhere should be grateful to the couple suing a Canberra in vitro fertilisation specialist for the wrongful birth of one of their twins, whatever they might think about the case.

They’ve put a figure on how much it costs to have another child.

They’re claiming $400,000 for the unintended birth of their extra daughter (they got two and say they only asked for one) most of which is the extra cost of feeding, clothing, teaching and the like.

The figure was calculated by Australia’s child-costing guru, Dr Paul Henman from the University of Queensland.

He has prepared expert reports in around 70 cases of wrongful birth, most involving failed sterilisation or contraception. All but three have been settled before going to court...

How does he work out how much it costs to have an extra child?

In just about the most complicated way possible.

The research began more than a decade ago when in order to get a handle on the adequacy of government benefits the Keating Government commissioned the Social Policy Research Centre at the University of NSW to add up the actual cost of each item that we need to live.

The team identified more than 700 such items, and prepared budgets for two standards of living: "modest but adequate", based on the prices of the leading brands sold at Woolworths; and "low cost" based on the prices of home brands.

Then it calculated the extra costs of providing for children. Children need extra toothpaste, extra refrigerator space and many more clothes. A six-year-old girl is assumed to need 49 different items of clothing and footwear, all purchased at Target. Where there are two girls they are assumed to be able to share a room until one turns 12 – after that they’ll need an extra room.

Henman has been updating the prices on the list but not the list itself ever since. That would be too big a project without new funding. It's left the list looking quaint. It allows for no spending on mobile phones. Visits to the doctor are assumed to be bulk-billed.

But it’s the best list we have. And assuming private schools, as he has for this couple, and leading brands rather than no-name products it prices an extra child at something approaching $400,000.

If you think you can‘t afford that without drastically cutting your standard of living you’re probably right. You can thank Dr Henman and the couple taking action in the ACT Supreme Court for letting you know.

Paul Henman's Cost of Kids website, School of Social Work and Apoplied Human Sceinces, University of Queensland.

Peter Martin,
Honey We can't afford the kids Sydney Morning Herald June 22, 2005