"Children Costs in a One-Adult Household : Empirical Evidence from the UK."

Abstract :
This paper addresses two critical questions for family and economic policy. Are estimates of the cost of children based on two-parent households generalizable to single-parent families ? Does the "two-child limit" policy—restricting family benefits to low-income parents with a maximum of two children—contribute to child poverty ? In this paper, I extend the collective consumption model to one-adult households, apply it to data from the Family Expenditure Survey (FES) in the UK, and present two key findings. First, child cost estimates derived from two-parent households tend to underestimate by 5.3 percentage points those incurred by single parents. Second, in low-income families, household size plays a crucial role in determining the proportion of resources allocated to children, a factor less relevant for higher-income families. This suggests that the "two-child limit" policy would likely exacerbate inequalities within larger families.