Children Costs in a One-Adult Household: Empirical Evidence from the UK

This paper addresses two central questions in family and economic policy. First, to what extent are estimates of the cost of children derived from two-parent households applicable to single-parent families? Second, is the recently introduced two-child limit policy in the UK appropriate given the diversity of family structures? To address these questions, I propose a collective consumption model for one-adult households, apply it to three datasets-the Family Expenditure Survey, the Expenditures and Food Survey, and the Living Costs and Food Survey in the UK-and present two key findings. First, child cost estimates derived from two-parent households remain externally valid for single-parent families, at least for single mothers. Second, in low-income families, household size plays a crucial role in determining the proportion of resources allocated to children, a factor less relevant for higher-income families. This suggests that the two-child limit policy would likely exacerbate inequalities and increase child poverty within low-income families.