PARENTS' MAGAZINE has come out with a finding that could put it out of business. According to this month's issue, it will probably cost $250,000 to rear a child born in 1980 to the age of 18. That does not include college. Along with this startling finding, Parents' Magazine also takes a swipe at figures compiled by the U.S. Department of Agriculture that the magazine says places the cost of rearing a child to 18 at about $65,000.
My first reaction to that was, where is the government finding its children? I'll trade. But it turns out that it's not as simple as it seems, and it also turns out that there is one highly annoyed economist working for USDA. Now I am not one normally given to defending government statistics on consumer expenditures since they make me feel that I am the world's worst shopper. But this time, Carolyn Edwards, the economist who put together the figures used in Parents' Magazine, has a case. Furthermore, since these figures are routinely used in child support cases and in trying to establish damages for malpractice and negligence suits involving children, it is important that the high cost of supporting children not be made any higher than it is.
Edwards has been working on the child-cost project ever since she arrived at USDA four years ago. Along with the figures, she has put out a user's guide so that people will know what the figures mean and how to interpret them. In the user's guide -- which is quoted in the Parents' Magazine article -- she specifically states that her figures are constant for 1978 dollars.
She then explains how to take those figures and calculate back to figure the cost of a child born in 1960. She also explains how to take those same figures and calculate forward for a child born in 1976.
She does not ignore inflation.
But after citing the $65,000 figure, the magazine says she does:
"The bad news is that these figures don't take any inflation into account. Only a government agency could be so apparently oblivious to inflation in this day and age." And: "Looking further at how the [average] $65,000 figure was arrived at, one gets the distinct feeling that bureaucrats don't have children." An exception is then taken to USDA's estimates for clothing for an infant in the first year ($115).
Edwards says her user's guide was misinterpreted. Further, she says, "economists who work for the federal government are acutely aware of inflation" (to which I breathed a sigh of relief).
Parents' Magazine clearly did not like the way the government went about calculating the cost of child rearing and pointed out, for example, that the cost of day-care and the mother's time weren't included. Edwards says that in 1973, when the consumer expenditures survey on which her information is based was done, child care costs and the mother's time were not considered.
"When the data was collected," she says, "the presence of two-earner households was not a major social issue, and the designers of the questionnaire didn't identify it as such." She says the USDA figures are based on a survey of what 20,000 to 30,000 families across the country actually do spend on raising their children. "We don't claim that these estimates try to cover what every single family spends, given all the particulars of their situation," she says.
"I still feel that while, yes, they are conservative, they are a better estimate of what 20,000 people spent than you would get by going out with a list of things in the Metropolitan Washington market area and pricing the items."
When the study started, she says, "people would call and be just incensed that we were trying to put a dollar cost on something so sacred as raising children. And now [they say], we don't know what we're talking about. . . I think they were taking an opportunity to take a jab at government research, but I think they were being unreasonable about it," she says.
"It's all impirical research. It's not like we sat down and did what the [Parents' Magazine] author did, quite frankly. It's a major, major research project. It's not something done in six months. We're a little sensitive to that."
Parents' Magazine arrived at its $250,000 figure by assuming a 10 percent annual inflation factor and by including $61,000 in non-earned salary for the custodial parent, as well as some other costs it found USDA was overlooking. Without those extras, it calculated the cost at $175,000. The USDA figures don't include child care costs, but since they vary so widely, they should probably be figured on the basis of individual families. s
So, in the end, given the difference in what the estimates include, what does Edwards think it will cost to raise a child during the next 18 years?
"If you take our moderate cost figures for a child born in the north central region of the country in 1979 and you are willing to assume 8 percent inflation, it comes to $134,000." With that rate of inflation, she points out, incomes will go up, too.