There is a wide array of theoretical models and economic research on how best to estimate child costs, including annual government surveys, income equivalence methods, and marginal cost measures. These approaches draw on key distinctions between actual monetary costs and broader economic cost concepts. Our Child Costs practice is experienced with the alternate cost measures and the methods used to measure them. We have advised policymakers on the relative strengths and shortcomings of the various approaches. Our team has also contributed to academic and industry literature on measuring child costs.

Many of the costs of raising children are indirect, non-observable costs shared by the adults and children in a household. As these costs cannot be directly measured, they must be estimated – controlling for key differences across households. Brattle’s Child Costs practice team is skilled in measuring indirect costs by applying statistical and econometric analysis to detailed data on household spending. We develop empirical evidence on the magnitude of child costs and how these costs vary by household income, family size, and other characteristics.

Federal law requires each state to review its child support guidelines at least once every four years to ensure that applying these guidelines results in appropriate child support amounts. States must consider the current and available data on the costs of raising children and apply these measures if the current guidelines do not fulfill the legal requirement. Our experts have advised states in evaluating their current guidelines, considering the impacts of making revisions, and implementing changes in practical terms.

As a matter of economics, child support guidelines should yield an appropriate level of financial support for a child from both parents in an efficient and equitable proportion. A well-designed formula is flexible and translates principles into practice. Developing these formulas requires consideration of the relevant economic factors that lead to different levels of spending on children, while remaining understandable and administratively feasible. The Child Costs practice has advised on the development of state child support guidelines formulas, with a focus on balancing economic accuracy with relative flexibility and simplicity.