The Growing Cost of Parenthood in Iran, 1992–2021

Introduction

An analysis of fertility trends in Iran demonstrates notable fluctuations over the past few decades. Fertility levels peaked in the 1980s at 6.9 children per woman, but a marked decline set in from the early 1990s—a trend that has persisted into recent years. Official statistics indicate that the total fertility rate (TFR) fell to 1.65 by 2020 (Fathi, 2020: 10). More recent figures further underscore this downward trajectory; for the first time since the 1979 Revolution, annual births dropped below one million in 2024, accompanied by a TFR decline to 1.34 children per woman in 2025.

Childbearing represents one of the most critical life-course decisions faced by parents, as it directly constrains both their financial and temporal resources. When considering reproductive choices, parents inevitably weigh multiple dimensions of costs and benefits. Within households of any given income level, specific expenditures are required to meet adult consumption needs. The addition of a child typically reduces the share of resources available for adult consumption, thereby lowering the baseline of overall household well-being. Consequently, to sustain a pre-child standard of living, an increase in household income becomes necessary (Rahimi & Molana, 2015: 16; Bradbury, 2004). In the absence of such economic adjustments, families often exhibit reluctance to expand their family size, prioritizing the preservation of their current welfare over additional childbearing (United Nations, 1990).

Decisions regarding household size are shaped dynamically by both the broader socioeconomic environment and the specific structural conditions of families, with fertility behaviors being adjusted accordingly (Abbasi-Shavazi & Khani, 2014: 34). These considerations, however, vary substantially across economic epochs. In agrarian economies, children were largely regarded as productive assets capable of contributing directly to household income. Conversely, in modern societies, the emerging phenomenon of “intensive parenting” reflects surging expenses associated with child-rearing and education (Sobotka et al., 2020: 30). Parents are increasingly aware of the full spectrum of direct and indirect costs related to raising children. This heightened awareness leads many to conclude that reducing family size enables them to allocate resources more effectively, not only in pursuit of their personal aspirations but also in providing a higher-quality upbringing and better opportunities for their offspring.

Today, a significant proportion of families in Iran confront severe economic challenges. Empirical research indicates that the annual growth in household income lags considerably behind the continuous increase in per capita household expenditures. This structural imbalance has compelled families to either restrict their number of children or avoid having larger families altogether (Maqsoodpour, 2015: 83). In other words, as a strategic response to intensifying financial pressures, individuals tend to delay marriage, postpone fertility, opt for greater birth spacing, or reduce their ultimate family size (Bagi, 2022). Childbearing also involves substantial opportunity costs. While the direct financial costs of children are typically shared between both parents, the opportunity costs are disproportionately borne by mothers, as income losses due to labor market interruptions impact them more heavily (Letablier et al., 2009: 26). Given these circumstances, contemporary couples increasingly limit their fertility because, akin to other resource-intensive commitments, children demand significant temporal and financial investments from parents (Abbasi-Shavazi & Khani, 2014: 33).

At a juncture when Iran’s total fertility rate has declined to an unprecedented low (1.34 children per woman in 2025), the economic costs of raising children—and their direct role in this demographic transition—have once again attracted scholarly attention. Economic constraints are widely recognized as a primary driver of fertility decline. Examining child-rearing expenditures can therefore provide valuable empirical insights for evaluating existing demographic hypotheses. Furthermore, understanding the economic considerations underlying parental decisions to have a child—or additional children—is crucial for designing effective welfare and incentive policies aimed at promoting fertility. As Bradbury (2004: 1) notes, the costs of children represent a highly influential factor in reproductive decision-making; accordingly, reliable data on these expenditures are essential for analyzing the determinants of fertility behavior.

Moreover, since governments inevitably bear a portion of the costs associated with child-rearing, policymakers require an accurate understanding of these expenses to effectively influence couples’ reproductive choices. Research on child-related costs provides essential empirical evidence for formulating macro-level policies that address household expenditures on children (Letablier et al., 2009: 18). This comprehensive understanding is particularly critical because child-rearing expenditures span multiple dimensions, all of which must be identified to determine the specific types of family support programs required and to evaluate the efficacy of institutional interventions aimed at helping parents manage these financial burdens.

A review of the empirical literature in Iran indicates that the systematic examination of child-related costs within families, and their specific role as a determinant of couples’ fertility choices, remains an under-researched area. Furthermore, the limited studies conducted in this field have generally been confined to narrow geographic boundaries and have relied strictly on cross-sectional designs. The present study addresses these gaps by adopting a longitudinal approach to calculate and analyze child-related expenditures in Iran over the past three decades (1992–2021), while also identifying the socio-demographic factors driving these costs. Accordingly, this study aims to address the following central research questions: What have been the economic costs of children in Iran during the period 1992–2021? And to what extent do child-specific characteristics (such as age, sex, and birth order) and family-level attributes influence these expenditures?

Literature Review

In contrast to the empirical literature in Iran, the study and estimation of child-related costs in other societies—particularly in developed countries—has a long-standing tradition and has consistently attracted scholarly attention. One of the earliest studies, conducted by Espenshade (1974), estimated the total monetary costs of raising children up to the age of 18, demonstrating that children’s expenses increase significantly as they grow older. Similar upward trajectories were reported by Glaude and Moutardier (1991), Van Imhoff and Odink (1994), and Bradbury (2004). Within this context, Hourriez and Olier (1997) found that in France, child-related costs remain relatively stable from early childhood until the onset of adolescence. By contrast, Bellamy (2007), also focusing on France, concluded that expenses related to childcare, education, and certain clothing items tend to decrease as children age.

A key factor in determining child-rearing expenditures is the opportunity cost of parental time, which can substantially increase the estimated total cost of raising a child. Analyses incorporating parental time suggest higher total expenditures and reveal income-driven allocation patterns that differ markedly from those based solely on monetary outlays (Gautham & Folbre, 2024). Market prices also play a significant role; in many contemporary contexts, parents face high fees for early childhood care and education (Gould & Blair, 2020). Furthermore, geography and macro-level policies shape child-rearing costs. State and national policies, the availability of institutional subsidies, and access to support programs heavily determine how much families ultimately pay out of pocket and whether childcare expenses restrict maternal employment (Farquharson & Olorenshaw, 2022; Landivar et al., 2021). Recent evidence underscores that formal childcare costs are rising, with notable variations by the child’s age and the family’s usage patterns. Policy design—including subsidies, refundable tax credits, and affordability guidelines—exerts a strong influence on families’ net outlays (Shaban & Amin, 2023).

Heather Joshi (1980) examined the opportunity costs of children by comparing two groups of women: childless women, who spent most of their lives in full-time employment, and mothers, who engaged in full-time work only for part of their lives. The income differential between these groups revealed that mothers’ lifetime earnings were approximately 43 percent lower than those of childless women (Lucas & Meyer, 2006: 93). In a related study, Gronau (1973) highlighted the impact of children on the value of women’s time within the household. He argued that opportunity costs should account not only for direct expenditures related to childcare and other services but also for the substantial time devoted to childrearing and household responsibilities, which restricts women’s participation in the labor market (Hashemi et al., 2017). Among Iranian studies, Rastegarkhaled and Moghadami (2018) investigated women’s employment and the costs of children, arguing that women engaged in employment outside the home or pursuing higher education do not perceive childbearing as an inevitable milestone. Because children impose considerable financial and temporal costs on parents, fertility trends tend to decline.

Bradbury (2004), utilizing time-use survey data and the adult goods method, estimated the full costs of children. His findings indicated that child-related costs are substantially high: a couple with two children requires an income approximately 2.7 times greater than that of a childless couple to maintain a comparable level of consumption. Michelini (2001) argued that the marginal cost of adding a child to a family remains constant regardless of the household composition; in other words, the cost of a child in a single-parent household is equivalent to that in a two-parent household. Moreover, the costs of a second child are comparable to those of the first child at the same age. By contrast, Poland and Seth-Purdie (2005) contended that the additional cost of successive children exhibits a diminishing effect, with the marginal cost of each successive child being lower than that of the previous one. Similarly, Glaude and Moutardier (1991) as well as Hourriez and Olier (1997) reported comparable findings, noting that during the period 1989–1995, the costs of a third child were lower than those of earlier-born children.

Sobotka et al. (2020) discussed the concept of "intensive parenting" in the context of the surging costs of raising children in the contemporary world. They argued that modern parents increasingly emphasize the importance of investing heavily in the emotional and cognitive development of their offspring. Consequently, the pressure on parents to allocate greater resources toward child development has contributed to the expansion of private schooling and homeschooling markets in several countries.

A review of previous studies reveals several literature gaps that the present research seeks to address. First, research on this topic in Iran remains highly limited, and the few existing studies have generally estimated child-related costs using cross-sectional data. However, to properly understand macroeconomic shifts and changes over time, these costs must be assessed longitudinally. Accordingly, the present study adopts a longitudinal approach to measure child-related costs in Iran. Additionally, this study aims to disaggregate these costs by age—an aspect largely overlooked in prior domestic research. This distinction is critical for designing targeted support programs, thereby ensuring greater attention to socioeconomically vulnerable households.

Theoretical Considerations

As societies undergo economic, social, and cultural transformations, the costs and benefits of childbearing are continually reinterpreted, shaping fertility behavior and family decision-making. Various theoretical perspectives have sought to explain how families evaluate the economic consequences of parenthood and how changing social conditions alter the perceived value of children. The theories reviewed in this section explain the rising costs of childbearing and childrearing, highlighting the roles of direct expenditures, opportunity costs, household decision-making, human capital investment, intergenerational resource transfers, and broader processes of socioeconomic modernization.

1. The Child Costs and Benefits Theory: The Child Costs and Benefits Theory, proposed by Leibenstein (1974), is one of the most important frameworks explaining the economics of fertility. This theory assumes that children provide three types of utility to their parents: (1) consumption utility, (2) labor and income utility, and (3) security utility. Conversely, two types of disutility associated with children are considered: (1) disutility due to direct costs such as housing, food, clothing, education, and healthcare, and (2) disutility due to indirect costs, such as forgone income opportunities resulting from childbearing.

In other words, according to Leibenstein’s framework (Bhende & Kanitkar, 1994), child-related costs are divided into direct and indirect types. Direct costs refer to the immediate expenditures parents must incur upon the birth of a child, including education, upbringing, and care, until the child reaches an age where they can provide economic benefits. Direct costs include expenses for food, clothing, entertainment, healthcare, and schooling. Indirect or consequential costs are generally conceptualized as the opportunity costs of lost income. These costs encompass reduced paid working hours, complete withdrawal from the labor market, loss of career advancement opportunities due to childbearing, and the substantial time allocated to daily childcare.

Another dimension within this framework differentiates between private and public costs (Figure 1). Private costs are borne directly by individuals or private networks (such as friends, neighbors, and charitable organizations), while public costs are covered by local and national governments (Poland & Seth-Purdie, 2005: 9). For example, state expenditures on children’s education and healthcare, provided either directly or through indirect subsidies, constitute public costs.

1. Family Welfare Economics and Household Consumption Theories: Gary Becker, in his theory of family welfare economics, posits that families function as economic units possessing a welfare function that represents their level of economic well-being. This welfare function is dynamically influenced by various factors, including the costs, constraints, and structural preferences of family members (Becker, 1981). Consequently, families consider childbearing desirable only when the expected utility derived from having a child exceeds the associated financial, temporal, and psychological costs. Becker’s Household Consumption Theory is among the most influential perspectives in the economics of the family. In this theory, Becker (1965) argues that households make rational decisions regarding resource allocation to maximize their total economic welfare. He introduces time and commodities as two fundamental components in household decision-making, emphasizing that households face strict time constraints that must be distributed efficiently across various market and non-market activities. Accordingly, the family is conceptualized as a productive unit that allocates its time and resources toward the “production” of micro-level commodities, such as child well-being or education. Childbearing, in this view, is understood as a long-term investment that requires the simultaneous allocation of both temporal resources (for care) and financial resources.
2. Human Capital Theory: The Human Capital Theory was developed by economists such as Gary Becker, Theodore Schultz, and Jacob Mincer. Schultz (1961) argued that human capital encompasses the qualitative skills, knowledge, and experience that individuals acquire to generate income and improve their socioeconomic status. Investment in human capital can be achieved through formal education, schooling, and cumulative work experience. In this regard, Becker (1964) stated that human capital consists of the skills, knowledge, and experience individuals obtain to increase their earning potential and economic well-being, emphasizing that returns on human capital are enhanced through education, training, and health investments. Similarly, Mincer (1974) highlighted that formal education and schooling represent essential forms of investment in human capital. Overall, the expenditures families incur for the education and upbringing of their children can be regarded as a direct investment in human resources, generating future economic returns. Accordingly, costs related to children’s education, health, and nutrition are viewed as essential components for enhancing their human capital.
3. Intergenerational Wealth Flow Theory: Another theory focusing on the economic dimensions of children is Caldwell's Intergenerational Wealth Flow Theory. This theory provides a demographic-economic framework for explaining fertility transitions and the perceived costs of children. According to this theory, the direction of net resource transfers between generations is the decisive determinant of fertility: in traditional and agrarian societies, resources predominantly flow from the younger to the older generations, as children contribute economically to the household labor force and provide physical and financial security in parents' old age. In contrast, in modern industrial societies, this flow is structurally reversed—parents invest substantially in their children through expenditures on education, health, and upbringing, while receiving little to no material or financial return. This reversal of wealth flows transforms children from economic assets into economic dependents, thereby exponentially increasing the perceived costs of childrearing and contributing to a sustained fertility decline (Caldwell, 1976). It can thus be argued that in a society where childbearing entails severe costs—such as insufficient income for subsistence, employment difficulties, labor market instability, and economic insecurity—the expected outcome is a decline in the number of children. Under such circumstances, children not only fail to generate economic benefits for parents but also impose significant upbringing costs, such as education and childcare expenses (Torabi & Sheidani, 2019: 40).
4. Modernization Theory: Modernization theory can also be employed to explain the increasing costs of children. Across nations, advanced industrial societies have transitioned from traditional agrarian economies to modern industrial economies centered around urbanization, with urban environments providing a fertile ground for structural transformations in various dimensions of human life (Montgomery et al., 2003). As household structures transition from extended to nuclear families, traditional pronatalist strategies and limited per-child investments lose their structural significance, and children are no longer viewed as economic contributors to the household budget. In nuclear family systems, individuals tend to be more independent and self-reliant, assuming greater responsibility for their own futures as well as for their children’s well-being. Furthermore, children in such families are culturally expected to complete their higher education, obtain stable employment, and meet their own material needs before transitioning into marriage. This institutional shift contributes to the postponement of marriage and significantly increases both the temporal and financial costs of raising children (Foote, 1956; Rossi, 1987).

Although these theories differ in their assumptions and explanatory focus, they converge on a common proposition: the economic burden of raising children tends to increase as societies undergo socioeconomic transformation. As families become more responsible for providing education, health, and other developmental resources, children require a growing share of household expenditures. At the same time, the declining economic contribution of children to family livelihoods and the increasing expectations surrounding child well-being reinforce the need for greater parental investment. This theoretical perspective provides the lens through which the present study examines the growing price of parenthood in Iran. The study focuses specifically on the direct economic costs borne by parents and assumes that changes in family life, patterns of consumption, investments in children, and broader processes of socioeconomic development are reflected in the level and structure of child-related expenditures. Accordingly, the analysis investigates how the direct costs associated with raising children have evolved in Iran between 1992 and 2021.

Methods and Data

This study employed a quantitative research design utilizing secondary data analysis. The primary data used to measure child-related costs were obtained from the microdata of the Household Income and Expenditure Survey (HIES), which is conducted annually by the Statistical Center of Iran. This comprehensive survey provides detailed household-level information across four major domains: (1) the socio-demographic characteristics of household members, (2) housing conditions and major residential facilities, (3) household expenditures, and (4) household income.

To supplement the HIES database, additional macro-level data were drawn from the National Population and Housing Censuses, alongside registered administrative statistics from the Civil Registration Organization and the Central Bank of the Islamic Republic of Iran. The statistical population covers the entire country, with the analytical framework focusing on the three-decade period from 1992 to 2021. In total, the dataset comprises information from approximately 600,000 pooled households.

The household serves as the unit of analysis. First, the average child-related costs for households were calculated across different years. Subsequently, the effects of household-level covariates—such as household structure and the socioeconomic characteristics of the household head—on child-related costs were examined. Data preparation, cleaning, and multivariate statistical analyses were conducted using Stata 17.

The dependent variable is child-related costs. In a comprehensive classification provided by Poland and Seth-Purdie (2005), the main methodological approaches for estimating child-rearing expenditures are categorized into five distinct groups: (1) the budget standards (“basket-of-goods”) approach, (2) the expenditure survey approach, (3) the foregone earnings estimation method, (4) time-use surveys, and (5) the consumption–income age profile estimation method. The present research applied the fifth approach.

This methodology was originally introduced by Mason et al. (2009) as part of the National Transfer Accounts (NTA) life-cycle estimation framework. The age profile of consumption and income ultimately identifies the exact share of aggregate household expenditures consumed by individual members at different ages. The purpose of the current study is to estimate parental costs, which Mason et al. (2009) conceptualize as private consumption. Private consumption represents the market value of goods and services consumed by individuals and households that are obtained through the private sector. Within this framework, it is assumed that the totality of household consumption can be exhaustively allocated to individual members.

Private consumption is typically allocated to household members based on survey data, and all household outflows or expenditures are generally taken into account. Mason et al. (2009) distinguish three fundamental components of private consumption: education, health, and other consumption. Education and health are estimated separately because their age-specific allocation patterns differ significantly from baseline survival consumption.

    Educational expenditures include tuition fees, textbooks, and school supplies across all institutional tiers, including preschool expenses and private tutoring.

    Health expenditures consist of out-of-pocket medical costs as well as household payments made to healthcare providers through private health insurance schemes.

    Other consumption (hereafter referred to as other costs) encompasses all expenditures on children apart from education and health, such as food, clothing, entertainment, durable goods, and related everyday items.

Educational expenditure is typically allocated using a regression-based model. Household educational consumption (CFEj​) is modeled as follows:

In this equation, ​ denotes the number of household members enrolled in formal education at single year of age a in household j, while and ​ represents the number of non-student members at age a in household j. The coefficients αa​ and βa​ represent the age-specific allocation parameters for students and non-students, respectively. It should be noted that this regression equation is estimated in a homogeneous form (without an intercept) to guarantee that aggregate household educational consumption is fully allocated among members without residual loss.

National household surveys usually provide explicit information on the enrollment status of each member. However, the regression method may occasionally produce negative coefficients for certain specific age groups where the sample size of enrolled individuals is exceptionally small or nonexistent. In such instances, negative coefficients are mathematically replaced with zero to prevent the estimation of conceptually impossible negative expenditures.

Accordingly, these regression estimates are employed to allocate the aggregate educational expenditures of each household j to its individual members i. For individuals currently enrolled in formal education, the allocation is determined as follows:

Where x represents the specific age of the ith household member. Educational expenditures for non-student members are calculated utilizing an identical proportional allocation rule based on the estimated β​ coefficients.

Allocating private healthcare costs is more complex due to the multiple, overlapping channels through which medical services are financed. In many countries, there are three primary sources of healthcare financing: private out-of-pocket payments, private insurance, and public sector spending. The precise method used to allocate healthcare costs is constrained by data availability. The regression approach used for healthcare differs from the model applied to education because household expenditure surveys generally lack an internal indicator specifying which particular member actually received or utilized the medical services. Consequently, aggregate household healthcare expenditures are regressed on the total number of household members within each age group ( ) using a zero-intercept linear model:

Other household expenditures are allocated to individual members using a temporary baseline allocation rule. It is assumed that the everyday consumption of individuals residing in each household j is proportional to a standardized equivalence scale. This scale is set at 1.0 for adults aged 20 years and older, decreases linearly from 1.0 to 0.4 between the ages of 20 and 4, and remains constant at 0.4 for children aged 4 years and below (Figure 2).

The following equation is used to distribute the general expenditures of each household j to its individual member i:

where x denotes the age of the ith household member.

The independent variables in the multivariate models of this study include household structure, place of residence, characteristics of the household head, and children’s attributes.

Findings

Expenditures by age are presented in Figures 3 to 5. The horizontal axis represents age, while the vertical axis represents the amount of expenditure. The differences in the vertical scales across the figures reflect differences in the magnitude of expenditures. For instance, expenditures in the “other expenditures” category are substantially higher than educational expenditures. Using the same vertical scale for all figures would make age-time-related variations less discernible.

Figure 3 illustrates healthcare expenditures by age from 1992 to 2021. As observed, healthcare costs for all analyzed age groups exhibit an increasing trend toward the end of the studied period. Additionally, higher age is associated with higher healthcare and medical expenditures. Another notable point is that the overarching trend in healthcare costs for children, adolescents, and young adults exhibits relatively minor variation, whereas spending fluctuations are substantially more pronounced among middle-aged and older adults.

Educational expenditures are expected to vary across childhood, adolescence, and young adulthood, generally remaining significantly higher than in other age groups. The results presented in Figure 4 confirm this expected lifecourse pattern. Overall, educational costs have shown an increasing trend from 1992 to 2021. Furthermore, across all studied years, these expenditures peak decisively between the ages of 18 and 24, a pattern that can be primarily attributed to the higher costs associated with tertiary education compared to other educational levels.

Figure 5 illustrates other household expenditures by age during the years under study. As observed, these general expenditures have increased systematically over time. Children incur the lowest absolute baseline expenditures, which subsequently rise steadily with age until individuals reach mid-adulthood. However, these age-driven baseline changes do not exhibit sharp or statistically significant fluctuations. From old age onwards, other household expenditures gradually decline while displaying a higher degree of statistical variability.

The average longitudinal expenditures on healthcare, education, and other costs for children under the age of 18 over the past three decades are shown in Figure 6. Overall, other general child-related costs account for a substantially larger proportional share of the household budget compared to specific healthcare and education expenses. Notably, all three distinct types of expenditures have shown a consistent upward trend during the period from 1992 to 2021.

An important issue regarding child-related costs in Iran is the high rate of macroeconomic inflation experienced over the past few decades. To identify the real, non-nominal changes in child-related expenditures, the confounding effect of inflation was removed from the calculations, and the deflated results are presented in Figure 7. These findings indicate that while real educational costs have followed a consistently increasing trend over the three decades, they remain at the lowest absolute expenditure level.

In sharp contrast, real healthcare and other costs experienced a pronounced, sharp increase until the early 2010s, after which they entered a downward trajectory. Therefore, the analysis strongly suggests that the observed historical increase in child-related expenditures is predominantly driven by persistent inflation. When adjusted for inflation, real child-related costs have not experienced a net growth over time. In fact, households appear to be allocating relatively fewer real resources to their children, which could carry serious long-term implications for children’s quality of life and overall household well-being.

Next, we examined the net impacts of family and child characteristics on child-related expenditures. To this end, four successive ordinary least squares (OLS) regression models were estimated. In Model 1, time (categorized by decades) was included as the main independent variable. In Model 2, household-level socio-demographic characteristics were added while controlling for the decade variable. In Model 3, child characteristics were included, utilizing time as a baseline control variable. Finally, in Model 4, both sets of characteristics were simultaneously incorporated to assess their combined net effect on child-related costs. The results are presented in Table 1.

The findings indicate that the time variable alone explains approximately 19.2% of the variation in child-related expenditures. The standardized regression coefficients further demonstrate that child-related costs increase significantly as we approach the contemporary period. Specifically, net expenditures on children in the 2000s and 2010s were 0.610 and 0.464 standard deviations higher, respectively, compared to the baseline reference decade of the 1990s.

In the second model, household characteristics, along with decade controls, explain 21.8% of the total variance in child-related expenditures. Upon including household-specific variables, the net effect size of the time variable is slightly reduced but retains high statistical significance. In this model, child-related costs increased by 0.059 and 0.445 standard deviations in the 2000s and 2010s, respectively, relative to the reference baseline of the 1990s. The geographic place of residence, gender, educational attainment, and the income level of the household head all exert statistically significant impacts on child-related expenditures, with rural-urban residence exhibiting the strongest net effect.

Compared to nuclear families, child-rearing expenditures are lower in extended and composite households, whereas single-parent households incur significantly higher costs. Specifically, expenditures in female-headed households are 0.003 standard deviations higher than in male-headed households. Additionally, child-related costs are significantly higher in households where the head has completed primary, middle, or tertiary education, increasing by 0.045 and 0.032 standard deviations, respectively, compared to households with illiterate heads. In contrast, households where the head has completed secondary education or holds a high school diploma show a 0.006 standard deviation decrease relative to the illiterate-headed households. Finally, the regression results indicate a positive net effect of the household head’s income on child-related expenditures, where each unit increase in income is associated with a 0.013 standard deviation increase in expenditures on children.

The results of the third model indicate that children’s characteristics, along with the time variable, explain approximately 20.3% of the variation in child-related costs. Even after accounting for children’s demographic characteristics, the time variable remains statistically significant, confirming that even if children’s characteristics had remained completely static across the three decades, child-related costs in the 2000s and 2010s would still be significantly higher than in the 1990s. The average age of children exerts a positive net effect: for each additional year in the average age of children, expenditures increase by 0.038 standard deviations. Conversely, as the total number of children under 18 residing in the household increases, per-child costs decline by 0.090 standard deviations, capturing the structural economies of scale and the spreading of fixed household expenses across multiple children. Furthermore, households with all-female children or a mixed-sex sibling composition incur significantly lower child-related costs compared to households with only sons, by 0.017 and 0.050 standard deviations, respectively.

Finally, Model 4, which incorporates all household head and child characteristics simultaneously along with the time variable, explains 22.6% of the total variance in child-related expenditures. In this full model, all integrated household and child characteristics are statistically significant. Time remains a powerful influential factor driving child-related costs, with expenditures during the 2000s and 2010s being 0.035 and 0.418 standard deviations higher, respectively, than those recorded in the baseline decade of the 1990s.

Conclusion and Discussion

The decision to have children is one of the most significant choices in the life course, as it directly affects parents' financial and time budgets. Empirical data on child-related costs are therefore essential for studying fertility behavior. Using a longitudinal approach, the present study aimed to estimate child-related costs in Iran over the past three decades and identify the multi-level factors affecting these costs.

The results indicate that healthcare and other child-related expenditures rise with age, while adolescents and young adults account for a larger share of educational costs. Overall, child-related expenditures have followed an upward trend over the past three decades, with everyday costs comprising the largest share of total spending. These findings are consistent with previous studies by Espenshade (1974), Glaude and Moutardier (1991), Van Imhoff and Odink (1994), and Bradbury (2004).

The observed rise in child-rearing costs can be interpreted through household economic and human capital theories. According to Becker's family economics framework (Becker, 1965, 1981), families weigh costs against benefits when making childbearing decisions. As expectations for children's education and health have risen, parents allocate more resources per child across generations. Human capital theory further explains this pattern: expenditures on children's education and health are strategic investments in their future productivity (Mincer, 1974; Schultz, 1961).

One of the most significant findings is that, although nominal child-related expenditures have increased across all categories, analysis of real expenditures—adjusted for inflation—reveals that the majority of the observed rise is attributable to persistent high inflation rather than genuine increases in household resource allocation. In real terms, resources devoted to children have not only failed to increase substantially but have even declined in areas such as healthcare and other expenses. This weakening of households' economic capacity to invest in children may have concerning implications for the country's future human capital.

Household location is a key determinant of child-related expenditures, with costs significantly lower in rural areas. Urban households tend to invest more in children's education and well-being and face higher living costs, whereas rural households experience lower per-child outlays. Studies by Espenshade (1973), Gracey (2002), and the USDA (2015) have reached similar conclusions. Household structure also significantly affects child-rearing costs, with nuclear families incurring higher expenditures per child—a pattern explained by Caldwell's intergenerational wealth flows theory, which holds that parents in nuclear families invest substantially in children without receiving direct economic returns.

The analysis further revealed a positive relationship between household head income and child-related expenditures, consistent with Ekert Jaffé and Grossbard (2011). As the number of children under 18 increases, overall expenditures rise while per-child spending declines—similar to Bradbury (2004). Glaude and Moutardier (1991), Hourriez and Olier (1997), and Poland and Seth-Purdie (2005) suggest that the cost of each subsequent child is lower than that of the first, though Michelini (2001) found no significant within-household differences. Gender composition also affects expenditures, with households containing both boys and girls incurring higher costs than same-gender combinations. Households with only sons tend to have higher incomes, as sons are often regarded as a future financial resource (Ziaei Bigdeli et al., 2006).

Based on these findings, several policy recommendations are proposed. Given the significant impact of the household head's gender, targeted support for female-headed households is warranted. Region-specific policies are also important: in urban areas, targeted subsidies could ease financial pressure, while rural areas require improved access to educational and healthcare services. Because child-related expenditures rise with income, fertility-enhancing policies should be targeted by income level, offering low-income households compensatory packages such as free child health insurance or educational supply kits. Finally, smart incentive policies that account for family structure—including parental leave, parenting education, and educational incentives for larger families—can positively influence child-rearing practices and future fertility decisions.

The most significant limitation of this study is the lack of longitudinal data on value- and attitude-related variables related to childbearing costs, which could not be included in the model. Additionally, indirect costs of childbearing could not be estimated. Future researchers are encouraged to examine both direct and indirect costs alongside attitudinal measures to provide a more comprehensive understanding of the economic determinants of fertility behavior.

Ethical Considerations

Compliance with Ethical Guidelines

The study used anonymized secondary data obtained from the Statistical Center of Iran. Since the research did not involve direct contact with human participants and all data were analyzed in aggregate form, no informed consent was required.

Acknowledgments

This paper is derived from the Master’s thesis of the third author in the field of Demography at Bu-Ali Sina University. The authors would like to express their gratitude to Dr. Mohammad Mobaraki and Dr. Mohammad Taghi Sabzei for their valuable comments and insights as thesis reviewers.

Funding

This article received no specific grant or funding from any public, commercial, or not-for-profit organization.

Authors' Contributions

This article is derived from the third author’s Master’s thesis. The first author served as the thesis supervisor, providing overall guidance and scientific oversight throughout the research process, while the second author served as the advisor and contributed to the conceptual development and refinement of the study. The third author conducted the literature review, collected and analyzed the data, and prepared the initial draft of the manuscript. The first and second authors contributed to interpreting the findings, critically revising the manuscript, and strengthening its theoretical and methodological aspects. All authors participated in developing the final version of the article and approved the submitted manuscript.

Conflicts of Interest

The authors declare no conflicts of interest.

Author’s ORCID

Milad Bagi: https://orcid.org/0000-0002-3690-2909 

Hatam Hosseini: https://orcid.org/0000-0002-4512-9225

Nastaran Karimi Aram: https://orcid.org/0000-0003-2715-3667