Parents Are Spending More on Children

Parents are spending more on children than they did a few decades ago, according to a unique examination of the phenomenon. Using Consumer Expenditure Survey data from 1972 through 2007, sociologists Sabino Kornrich and Frank Furstenberg measure parental spending on items intended for children. Not only are parents spending more on each child, but they are spending more on their children as a share of income. Average annual spending per child under age 25 grew from $1,315 in 1972-73 to $2,196 in 2006-07 (in 2008 dollars).

Over the years, middle- and upper-class parents have boosted their spending more than lower-income parents, say the researchers. Consequently, the gap in spending between rich and poor is growing. In 1972-73, parents in the highest income decile spent 4.7 times as much per child as those in the lowest income decile. By 2006-07, the multiple was 8.8.

Interestingly, the findings show a shift in the timing of maximum investment in children. Before the 1990s, parents spent the most on teenagers. By the mid-2000s, parents were spending the most on preschoolers and children in their twenties.

Source: Investing in Children: Changes in Parental Spending on Children, 1972-2007, Sabino Kornich and Frank Furstenberg, Demography, Vol. 50, No. 1, February 2013 ($39.95)