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

The literature on equivalence scales has primarily focused on children living in two-parent households. This paper examines whether estimates of the cost of children derived from such households can be generalized to single-parent families. For this purpose, I extend the collective consumption model to one-adult households, using data from the United Kingdom Family Expenditure Survey (1978–2020). The estimates of children’s costs are based on the assignable goods method and the assumption of orthogonality between parental preferences and demographic changes. The findings suggest that estimates based on two-parent households may underestimate the costs faced by single parents. Additionally, family size is a significant determinant of children’s resource shares in lowincome families, but not in high-income families.