Financial concerns are the leading reason young adults are opting not to have children according to a new study.
MassMutual found that 23 percent of millennials and members of Gen Z who do not currently have children say they do not plan to have a family because of financial reasons.
“With today’s financial stressors, it is understandable why there is a growing trend among young adults to prioritize financial security over parenthood,” said Paul LaPiana, MassMutuals’s head of brand, product and affiliated distribution, in a press release. “This shift reflects a broader understanding of the importance of financial stability and independence in achieving long-term goals that every generation must reckon with.”
At least 43 percent of young adults said they would prefer to remain financially independent. The same number said they were not able to afford children.
Their fears about the increasing costs associated with having children are not unfounded. Both privately and publicly funded research shows parents are struggling to keep up with rising expenses.
According to a 2023 study from LendingTree, the cost of raising a child rose by 19% between 2016 and 2021. The company estimates that the annual essential costs of raising a young child reached $21,681 and says the average family spends 19% of their annual income on the basic expenses of having a small child.
Modern American families are expected to spend just over $237,482 raising a child to the age of 18.
Childcare costs in the United States have climbed every year between 2014 and 2021 with one exception – 2020 which was marked by COVID-19, stay-at-home orders and general economic disruption. Moreover, many child care centers permanently closed their doors between 2020 and 2021, adding additional pressure on working parents.
According to the U.S. Department of Labor’s National Database of Childcare Prices, “childcare prices for a single child ranged from $4,810 for school-age home-based care in small counties to $15,417 for infant center-based care in very large counties.”
“When adjusted for inflation, this equals between $5,357 and $17,171 in 2022 dollars,” the database’s report stated. “These price ranges are equivalent to between 8 percent and 19.3 percent of median family income per child in paid care.”
The DOL’s Women’s Bureau Director Wendy Chun-Hoon said that the database’s analysis of 2,360 counties found “that – where childcare prices are high – mothers are less likely to be employed outside the home, even in places with higher wages.”
“All across the country, families are facing burdensome childcare expenses. The last few years have highlighted the tension parents experience when they need to go to work to provide for their families, but have difficulty doing so if they can’t access affordable child care,” said Chun-Hoon in a January 2023 press release. “Reducing out-of-pocket childcare expenses for families would support higher employment, particularly among women, lift more families out of poverty, and reduce disparities in employment and early care and education.”
Online caregiver marketplace website Care.com released its 2024 Cost of Care Report in January. The national average for the weekly cost of a nanny rose 4% between 2022 and 2023 to $766. Average weekly daycare costs surged by 13% to $321 during the same time while the average weekly cost of a babysitter jumped by 7% to $192.
“Within the first five years of their child’s life, parents are being forced into a financial hole that is nearly impossible to climb out of,” said Brad Wilson, Care.com’s CEO, in the report. “A healthy economy depends upon the ability for people to save and spend, but given the crushing weight of child care costs, those pillars are crumbling.”
“The child care crisis should be a major red flag for everyone, not just parents,” he added. “It is a systemic failure that will impact our nation’s economic growth, and that affects us all.”
MassMutual's report comes months after the Centers for Disease Control's National Center for Health Statistics announced America's general fertility rate had hit a new historic low. The nation's fertility rate has dropped by 3% since 2022. Just over 3.5 million births were recorded in 2023, or roughly 54.4 births for every 1,000 females between the ages of 15 to 44.
