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

This paper addresses two central questions in family and economic policy. First, to what extent are estimates of the cost of children derived from two-parent households applicable to single-parent families? Second, is the recently introduced “two-child limit” policy in the UK appropriate given the diversity of family structures? To address these questions, I propose a collective consumption model for one-adult households, apply it to three datasets—the Family Expenditure Survey, the Expenditures and Food Survey, and the Living Costs and Food Survey in the UK—and present two key findings. First, child cost estimates derived from two-parent households remain externally valid for single-parent families, at least for single mothers. 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 and increase child poverty within low-income families. JEL Classification: C30, D11, D12, D36, D63, I31, J12, J13