Despite changing norms around family planning and parenthood, the stereotype that “two children make a family” remains deeply entrenched, with many families saying it is still their preference. Yet, birth rates in the U.S. and other countries continue to decline, approaching record lows, according to the CDC.
The disconnect between family perspectives and actual day-to-day choices reveals a deeper issue: Raising children in America has become a financial decision and, for many, impractical and logistically overwhelming. The dip in births concerns economists because the significant drop means uncertainty in our economic and social future.
To combat the decline, governments in many developed countries offer varying cash bonuses; the current US presidential administration is considering offering Americans a $5,000 payment for adding a child to their family. Although a “baby boom” would theoretically aid the economy and reduce concerns about future shortages in the labor force as the population ages, an actual uptick in births is unlikely.
The Baby Boom Solution Myth
To counter aging populations and plummeting birth rates, and to stabilize economic futures, other countries have offered substantial financial incentives, cash bonuses, or tax breaks to couples having more children. Hungary had a policy that eliminated personal income tax for women having children before age 30, and for those who have four or more children.
South Korea tried a more unique attempt by starting a blind-date program with the intention of fostering relationships that lead to marriage and babies. And in more desperate attempts to promote a baby boom, Italy and the city of Copenhagen used scare campaigns reminding women of their biological clocks and the “dangers” of postponing childbirth. None of these approaches were received well.
Regardless of curated messaging or perks offered, policies aimed at promoting a baby boom are widely unsuccessful because they don’t address the broader, lifelong costs of parenting.
Raising a Child Keeps Getting Pricier
In the U.S., the cost of pregnancy and delivery alone can range from several thousand dollars to more than $20,000, depending on location and delivery method. And that’s just the beginning of the outlays. An analysis from USAFacts estimated that the average cost of raising a child in the U.S. from birth through age 17 increased by 16% since 1960. On average, it now costs more than $300,000 to raise a child to age 18 in a middle-income household.
Housing makes up the largest share of those expenses, followed by food, childcare costs, and healthcare. Childcare can rival the cost of a mortgage. A one-time $5,000 bonus from the U.S. government might offer short-term relief, but it doesn’t scratch the surface of the long-term commitments associated with childbearing and raising children. The U.S. remains one of the only wealthy nations that doesn’t guarantee paid parental leave, making those early months of parenthood even more precarious and difficult.
More to the Story
Financial stress is just one part of the story driving the smaller family trend.
Many women focus on building careers and feeling secure in their jobs before starting a family. They tend to be in work environments that lack flexible work policies. Despite strides in gender equality, caregiving continues to be a role that falls largely on mothers, making the professional costs of parenting disproportionally high for women.
A 2025 survey reported by The Times revealed that a high percentage of women from Gen Z and millennial cohorts believe that motherhood can negatively impact their careers and self-confidence. And there are real reasons for those beliefs: A recent article in the Financial Times highlighted that despite women’s advancements in education and careers, having a child often leads to career stagnation due to persistent gender norms and expectations.
This tension isn’t just about income or opportunity, it’s about identity. Many women fear what motherhood may do to their sense of self, both in and out of the workplace. A study published in the Journal of Child and Family Studies found that perceived conflict between professional and maternal identities can significantly impact a women’s well-being, self-esteem, and life satisfaction.
Add that to mounting anxiety about climate change, and uncertainty over politics and economic futures, and it’s no surprise that many people of childbearing age are choosing to have fewer children, one child, or no children.
What Really Supports Families
While cash incentives may grab headlines and offer temporary relief, they don’t address the bigger picture. Policymakers need to think beyond a one-time bonus and start investing in structural changes like paid parental leave, workplace flexibility, affordable childcare access, and healthcare reform.
Raising children is more than a personal decision; it’s a social investment. And for many parents, how many children to have is weighed heavily against financial realities and lack or presence of a supportive infrastructure.
The idea of a baby bonus might feel like a solution at first glance, but for most parents, it doesn’t come close to addressing the total financial picture or the day-to-day struggles of raising children. If you were given the option of a baby bonus, tax relief, or other perks, would it incentivize you to have a child or to have more children?