The Subjective Cost of Young Children: A European Comparison

Sonja Spitzer, Angela Greulich, Bernhard Hammer

Social Indicators Research, First Published 15 May 2022

Paper in open access via Springer Link - https://doi.org/10.1007/s11205-022-02942-5

The researchers have investigated how the birth of a child affects the objective and subjective economic situation of young parents in Europe. They mobilize longitudinal data from the European Union’s Statistics of Income and Living Conditions, covering the time period 2004 to 2019 for 30 European countries.

Does the work and income situation for young parents differ between European countries?
They study the career break: is it and to what extend primarily reserved for mothers?
Is it the case in every European country that parental leave massively harms women in their working life, while fathers have no losses?

Results show that newborns decrease subjective economic well-being in all regions, yet with economies of scale for the number of children. The substantial labour income losses of mothers explain only a small part of subjective child costs. The initial drop in subjective economic well-being observed shortly after childbirth is caused by increased expenses due to the birth of a child and other drivers such as stress.

The study finds that everywhere in Europe, mothers take longer breaks from work than fathers – particularly in the German-speaking countries.

The authors observe that despite a decline in labor market income for mothers after childbirth, the household income of many couples remains relatively constant across all regions in the short term. This is, firstly, because – on average – a lot is offset by public subsidies, such as lump-sum benefits and leave payments. Secondly, the labor incomes of many fathers are observed to increase slightly after the birth of a child in many European countries regions.