The Subjective Cost of Young Children: A European Comparison

Sonja Spitzer (), Angela Greulich () and Bernhard Hammer ()
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Sonja Spitzer: Wittgenstein Centre for Demography and Global Human Capital (IIASA, OeAW, University of Vienna)
Angela Greulich: I.E.P. Sciences Po Paris - OSC and Institut Universitaire de France
Bernhard Hammer: Technical University of Vienna

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2022, vol. 163, issue 3, No 7, 1165-1189

Abstract: Abstract Understanding child-related costs is crucial given their impact on fertility and labour supply decisions. We explore the subjective cost of young children in Europe by analysing the effect of child births on parents’ self-reported ability to make ends meet, and link it to changes in objective economic well-being such as income, benefits, and employment. The study is based on EU-SILC longitudinal data for 30 European countries from 2004 to 2019, enabling comparisons between country groups of different welfare regimes. Results show that newborns decrease subjective economic well-being in all regions, yet with economies of scale for the number of children. Mediation analyses reveal that the substantial labour income losses of mothers (indirect costs) explain only a small part of subjective child costs. In the first year after birth, these losses are mostly compensated for via public transfers or increased labour income of fathers, except in regions where women take extensive parental leave. This suggests that the initial drop in subjective economic well-being after childbirth is caused by increased expenses due to the birth of a child (direct costs) and other drivers such as stress that are reflected in the self-reported indicator.

Keywords: Cost of children; Subjective economic well-being; European welfare states; Mediation analysis; EU-SILC (search for similar items in EconPapers)
JEL-codes: D19 J13 J16 J18 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11205-022-02942-5

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