The unbearable (financial) burdens of parenting

Taking Nigel Dodd's work on the social life of money as a springboard (Dodd (2014) 2016), Nina Bandelj makes an impassioned call to extend his approach to studying the social life of money spent on children. In the process she draws attention to the transformation that has taken place in the last few decades in the United States to increasingly view children as sites of parental financial investment. Radically increased spending, saving and borrowing for children is part of relational work, in which today's parents are expected to engage so that they can help their children develop the necessary skills to thrive later in life. A large portion of these parental expenses are educational expenses, like tuition for higher and sometimes secondary education, a wide swath of enrichment activities (like sports and theater camps), and supplementary education offerings like math tutoring and SAT preparatory classes. In her analysis of parental expenses on children, Bandelj also includes expensive mortgages that buy families access to high-performing public school districts. This is because public school education in the United States is mainly financed through local property taxes, and the price of real estate in towns with high-performing schools reflects this. In making her argument, Bandelj echoes Viviana Zelizer's work on the historical and cultural transformation that took place in the United States at the end of the 19th—early 20th century when children went from being perceived as economically useful to being viewed as economically valueless but emotionally priceless (Zelizer, 1985). Recently, Bandelj contends, children are increasingly being treated as sites of parental investment into their human capital. To be sure, Bandelj acknowledges that “the emotional pricelessness of children is still quite salient” (Bandelj, page xx), yet she argues that the “human capital child” is now taking center stage as mere “childrearing expenditures” that characterized parental spending on children in much of the 20th century are replaced with much more ambitious and future-oriented “parental investments”. This means that the social value of children is being transformed yet again. It now encompasses skill-building that can start very early on, as early as in utero, in order to increase children's future productivity and help them command a better price in a future labor market. Moreover, this cultural shift does not only re-evaluate what childrearing should look like today, and what ends it should pursue, but it also puts the spotlight on parental identities and what it means to be a good parent. Citing both qualitative and quantitative data, Bandelj calls for a comprehensive approach to studying how money flows in households, particularly in relations between parents and children. Such a comprehensive approach would not only account for the cultural changes like the widely-shared emphasis on intensive parenting, or the belief in the utmost importance of higher education for children's future life chances. It would also highlight the structural changes that both necessitate greater parental investments, such as growing educational costs, and the simultaneous reduction in public expenditures on education, and facilitate them. To illustrate the latter point, Bandelj presents evidence on the proliferation of various financial tools like the 529 education savings accounts that allow parents targeted and, sometimes, tax-free savings to pay for children's educational expenses, as well as the parental advice industry instructing on the “proper” and “expected” relations between parents and children, including cultural expectations of parental financial obligations toward their children. Finally, Bandelj concedes that the opportunity to invest in children greatly varies by income and race/ethnicity, and depends on the resources available to parents. A lot of what Nina Bandelj states rings true to me. One cannot deny the steep rise of education costs, and the proliferation of various financial instruments to help parents save and pay for these ever-increasing expenses while they also facilitate their children's competing for admission to highly coveted spots in the nation's top colleges. It is a particularly familiar story to anyone who lives in one of the high-cost towns with excellent public schools, or whose children attend highly competitive high schools, whether public or private. In the rest of this essay, I will raise six points that are intended to nuance this picture, and set scope conditions on some of these claims. In a nutshell, parental investment in children's human capital is indeed a compelling story of what parenting is like financially in the 21st century United States. But it is not the only story to be told. My first point is about clarifying or specifying some of the empirical data used (or drawing attention to the data that are absent). Bandelj provides compelling evidence that parental investments in children are riddled with inequality: families with income in the top decile manage to accumulate significantly more financial assets for their children, and white families accumulate more assets than Black and Hispanic families. At the same time, families in the lower income groups as well as Black families with children are more burdened by educational debt—calculated as share of education debt to all assets—than are higher income families and white families. But why are there no data reported for Asian families? It is particularly unfortunate given that educational attainment and college attendance for Asians surpass those of other racial and ethnic groups, and the extremes of intense (aka “tiger”) parenting are often associated with Asian communities. It would therefore be important to include data on parental investments by Asian parents. Other data may have alternative interpretation. We are told that the much higher debt burden that Black families with children carry (Bandelj, xx, Figure 5) suggests they borrow relatively more to pay for their children's educational expenses. But in a recently published report from the Urban Institute that uses a different data source, we learn that while “blacks are most likely to have student loan debt…we do not find evidence that blacks are more likely than whites or Hispanics to borrow for their child's or grandchild's education” (Braga, 2016, emphasis is mine). Two possible explanations are given: one is that Black families are more credit constrained (Bandelj acknowledges this); the other one is that disproportionally more Blacks enroll in college when they are older. In other words, these student loans are likely for their, and not their children's, education. If this is the case, it is a very significant finding but not the evidence to support the argument about parental investments in children. Finally, some of the empirical evidence presented seems very surprising, and warrants more explanation, for example, the reported average size of the education debt held by families with children: it apparently only grew from $948 in 2001 to $4283 in 2016 (Bandelj, p. xx). These numbers seem very low, and likely include families with zero educational debt. It would be important to know the average (or median) debt held by those families with children that have any debt, and the portion of families with children that belong to this category. Is it possible that we are starting to witness a backlash, if not to the social value of higher education, but to its economic value? It could be a result of higher education costs completely divorcing financial reality of even many upper middle-class families, so that it is not uncommon, for instance, for children to matriculate into more affordable but less prestigious colleges than the most select ones that admitted them (many self-styled college advisors, like Harlan Cohen @harlancohen, advocate for prioritizing affordability and graduating debt-free rather than selectivity/prestige when making the final choice of where to attend). According to a recent Pew Research Center survey, only 22% of surveyed U.S. adults believe that “the cost of college is worth it even if someone has to take loans”, while additional 47% say “worth it, but only without taking out loans,” and 29% say “not worth it” (Fry et al., 2024). Granted, the majority believe it is worth it if one does not have to borrow, and the various financial instruments like 529s do help parents save. However, according to the Education Data Initiative, an average American with a 529 plan has $26,783 saved, which is enough only for one year of attending a public 4-year degree college for one child (Hanson, 2024). As much as parents may feel obligated to invest into their children to assure their futures, middle-age parents also feel obligated to help their own elderly parents, particularly if the latter are incurring high medical or long-term care costs (Zaloom, 2019). And the competing needs must put a considerable damper on parental investments in children. Let's look at the numbers. More than 6 million Americans currently use paid long-term services delivered in home and community settings, and more than 2 million people are residents of institutional settings like nursing homes and assisted living facilities, according to the estimates by the Congressional Budget Office. A likely comparable number of people rely on care provided by unpaid caregivers - family, friends, or neighbors - because they struggle to afford to pay for the services: the estimated average annual cost of nursing home care in the United States is $100,000, and an equivalent cost of assisted living facility or in-home care is $60,000 (Hamel & Montero, 2023). And despite what many Americans may think, Medicare—a federal health insurance for the elderly and some younger people with disabilities—does not pay for the type of long-term care that many elderly Americans will require when they are faced with age-related physical or cognitive decline. It only pays for post-acute skilled nursing care of limited duration, usually up to 100 days. Medicaid—a federal and state program providing health coverage for lower income individuals—does pay for long-term care for those deemed eligible. But to become eligible, families need to go through a process called spend-down, which involves demonstrating that they have limited income and no assets (with some exceptions). Currently, Medicaid pays for about half of overall costs of long-term care in the United States. More than 80% of those over 65 who need long-term care services for five years or more will enroll, including, unexpectedly, half of upper-middle-class couples whose lifetime earnings exceed $4.75 million (Johnson et al., 2021). Are we witnessing another possible backlash to the relentless academic pressures on children to develop skills and earn credentials, and to the financial pressures on parents to invest in building their children's human capital? American families are facing a mental health crisis among American children. Arthur Brooks of The Atlantic reports that according to a recent survey, sponsored by the Walton Family Foundation and fielded by Gallup, 38% of respondents between the ages of 12 to 26 have been formally diagnosed with anxiety or depression, including 29% of men and 45% of women. Additionally, half of those that have not been diagnosed report frequent feelings of anxiety, and a quarter of those undiagnosed report feeling depressed (Brooks, 2004; see also Mehasce, Menasce Horowitz & Graf, 2019). A recent book by Jonathan Haidt calls today's teens and young adults “the anxious generation,” and blames the rise in anxiety on the wide availability of smart phones and social media among children starting from very early age (Haidt, 2024). The COVID pandemic and associated lockdowns and broad disruptions to schooling, recreation and social relations further exacerbated this already growing problem (CDC, undated a). And parents are understandably worried. According to the 2022 Pew Research survey, children's mental health struggles were the number one parental concern with 40% of parents stating that they were extremely/very concerned, and another 36% stating they were somewhat concerned (Gramlich, 2023). Academic pressures are likely not the cause of the crisis of mental illness among teens and young adults, but easing academic pressures is often seen as a solution. Many school districts and college admissions have recently introduced more lenient grading and flexible deadlines or made college admissions test-optional.1 In her book Race at the Top: Asian Americans and Whites in Pursuit of the American Dream in Suburban Schools, Natasha Warikoo (2022) explained that school administrators in a North Eastern town she calls Woodcrest, concerned about the effect of academic pressures and competition on student mental health, implemented policies to reduce the amount of homework that teachers could assign. She also notes that this was a move advocated by white parents who were critical of Asian parents' “tiger parenting” style, and threatened by Asian students' higher academic achievements. The issue of mental health brings me to my fifth point. Both in Viviana Zelizer's original formulation of the social value of children, and in Bandelj's current argument about parental spending, there is one particular blind spot: both only consider the value of healthy children.2 In fact, in the “economically valuable” model of the 19th century discussed in Pricing the Priceless Child, only healthy and able-bodied children had any economic value at all. There are many more children today that live with disabilities or serious illnesses than ever before. According to Pew Research, there are 7.3 million students with disability in the United States, and they comprised 15% of students enrolled in public schools nation-wide in the 2021-22 school year (Schaeffer, 2023). Their parents are faced with a very different set of challenges and expectations (Eichenstein, 2015; Kefalas, 2021). Moreover, in a country like the United States, with its relatively low rate of investments in social services to support families with children, such children usually require a lot of necessary but costly medical and nonmedical therapies that need to be paid for out-of-pocket, and many American parents struggle to do so. In 2012, 36% of families with children reported experiencing financial burden because of medical care costs (Cohen & Kirzinger, 2014). This rate is higher than among families of two or more adults without children (25.2%) or among single adults living on their own (20.1%). To think about the specific costs that parents may incur, let's take Autism Spectrum Disorder (ASD) as an example. Today, one in every 36 children in the United States in diagnosed with ASD (Autism Speak, undated). The costs of raising a child with ASD may include residential care expenses, special education, various medical and non-medical services (such as diagnostic screening, behavioral, physical and speech therapies, etc.) as well as productivity loss for the parents (Buescher et al., 2014). While in countries with socialized healthcare systems much of these costs are borne by healthcare payers, in the United States, a significant portion of these costs are the responsibility of parents and families. All in all, while the financial burdens on parents of disabled children are often a result of very similar processes documented in public education and reported by Nina Bandelj, such as states shifting responsibility for care away from publicly funded programs to families, these families are likely faced with a set of very different challenges from the world of competitive schooling Bandelj describes. My final point is that it is not only the parental investments in child development and education that we should be closely following, but investment in becoming parents to begin with. The American fertility industry is estimated to be worth $8 billion today. The recent WHO report places the rate of infertility at 17.5% globally (WHO, 2023), but many more people outside these statistics rely on assisted reproductive technologies (ARTs), thanks to changes in cultural attitudes and laws that have made parenting by non-traditional parents, such as same-sex couples, single individuals and older people, much more mainstream. In the United States, the cost of the reliance on ARTs varies from a few hundred dollars for a vial of sperm to more than a hundred thousand dollars for a surrogacy arrangement. According to the US Centers for Disease Control and Prevention, 2.3% of babies born in the US are born via IVF (CDC, undated b).3 This number also includes babies born to non-American parents, specifically those that travel to the US in search of surrogacy if it is unavailable or restricted in their country of residence. At the same time, this number does not account for babies born to Americans who traveled abroad for fertility treatments, typically in order to save on costs (Guseva, 2020), as well as those babies that are born in the US with the help of artificial insemination with or without sperm reliance on can the fertility industry say about the from from to One may be to point out that the of and sperm in the American reproductive where the most of and could be on for or more & 2020), is in a of parental investment in both the physical and of children. so. 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