How much does a child cost?

The family is a central pillar of society. Quite simply, without children, our society will die out. And as important as it is to look after pensions, it is just as important to think about family policy. We need to look into the question of how much a child costs and what support families receive from the authorities or companies.

A distinction must be made between direct costs in the form of additional costs - health insurance premiums, food costs, etc. - and indirect costs. The latter arise due to a reduction or interruption of professional activity in favour of the children and result in a loss of earnings or a lower income.

In Switzerland, the state intervenes financially to cover some of these costs: The two means of doing so are family allowances and tax deductions . There are others, including federal contributions to reduce the costs of external childcare and premium reductions from health insurance companies for children and young people. In some cantons (Geneva, Ticino, Solothurn, Jura and Vaud) there are also supplementary benefits for families, which - unlike family allowances - are only paid to families with limited financial resources.

With us, a child costs around 1,500 francs per month

In 1988, on behalf of Pro Familia Switzerland, Joseph Deiss, Marie-Luce Guillaume and Ambros Lüthi were the first to attempt to measure the cost of having a child. They investigated the question of what additional income a family with children needs to achieve the same economic standard of living as a childless couple. The authors of the study came to the conclusion that a couple with one child would have to have an income 24 per cent higher than a couple without children. For a couple with two children it is 43 per cent, for three children 60 per cent.

In 1995, a study was published by the Bureau for Labour and Social Policy Studies (BASS). It opened up a new dimension in relation to the study of child costs by introducing the concept of indirect costs. These are the costs that arise due to the reduction in professional activity, mainly of the mother, after the birth of a child. In fact, the vast majority of women decide to reduce their working hours or interrupt their professional activity for a certain period of time after the birth of a child.
In addition to the loss of earnings, an interruption also represents an obstacle to professional development and ongoing training; this also currently affects women in particular. In 2016, half of all women with children under the age of 12 were either not working or were working a reduced workload of less than 50 per cent.

Following the BASS study, the Federal Social Insurance Office commissioned the same company to conduct an in-depth study in which the direct and indirect costs were supplemented with two new variables: an estimate over a longer period of time and a differentiation of these costs by income category. The following table shows the direct and indirect costs for children on the basis of an average income and over a period of 20 years:

Extrapolated to the total population, the indirect costs amount to several billion francs. Our economy has to do without qualified labour on a large scale, which means it loses out on an enormous amount of money - money that is missing because the framework conditions for balancing work and family life are not in place.

In 2009, BASS, together with the University of Berne, drew up a new calculation of the costs of children. The context had changed considerably since the BASS study: On the one hand, longer periods of education led to higher costs, and childcare expenditure has risen. On the other hand, the increasing participation of mothers in the labour market reduced indirect costs.

Only one sixth of the costs are offset

Among other things, the researchers investigated the question of how and to what extent the authorities compensate for the additional amount that families have to spend. According to the studies, this amounts to CHF 47 billion, consisting of direct and indirect costs.
The result: only one sixth of this is compensated. And this is very unequal in terms of direct and indirect costs: family allowances, additional benefits for parents, grants and tax deductions for childcare costs are used to offset 6.22 of the 22 billion francs in direct costs, i.e. just over a quarter. Indirect costs are practically not compensated (1.1 billion of 25 billion). A small amount is offset by childcare credits in the AHV or by funding daycare centres.
In most European countries, the public sector contributes much more to relieve the burden on families. A reduction in employment not only leads to a loss of income, but also results in a gap in social insurance, for example in occupational pension provision, where a lack of contributions - particularly in the event of divorce - leads to considerable losses.

If we want to support families and reduce the risk of poverty, it isessential to create favourable framework conditions for reconciling work and family life and to increase support services for families. This requires targeted financial benefits for people with limited resources so that they do not become dependent on social welfare.
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Read more:

• How do poor children live in Switzerland? Bettina Fredrich from Caritas Switzerland on an invisible phenomenon, precarious living conditions and a state that should provide better support for families.
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