Parenting on a budget: The cost of raising children in changing family configurations and its policy implications

OECD populations are ageing, driven by increased longevity and declining fertility rates. The decline in fertility is influenced by multiple factors, including evolving family structures and social norms, as well as the rising cost of raising children. However, accurately estimating the cost of child-rearing across OECD countries remains challenging, in part due to the absence of harmonised methodologies. Gaining a clearer understanding of these costs – and how they vary across different household types – is essential for assessing families' financial pressures. This paper presents new estimates of the impact of family structures on the cost of raising children for OECD European countries, using the European Household Budget Surveys (EU-HBS) and the EU Statistics on Income and Living Conditions (EU-SILC). It concludes that improving the collection of detailed and comparable data on family structures, living arrangements, and inter-household transfers – particularly those involving non-resident children – is essential for income, living conditions, and household budget surveys. Such information is critical for accurately assessing how different care arrangements impact financial hardship, especially among single-parent households. More broadly, this data is vital for understanding how rising living costs influence consumption patterns and fertility decisions across diverse family living situations.