Abstract

This paper develops estimates of the cost of children in Australia for the first time using financial stress data from the HILDA longitudinal Survey. The paper finds that using financial stress data in pooled waves of HILDA provides a strong basis for estimating equivalence scales and their related cost of children. It is estimated that the cost of children is a little lower than previously estimated and that there are not substantial differences between younger and older children as has previously been found. The results show that around 8 per cent of families with children receive family payments that Improve their living standard relative to that same family without children. The results also show that family payments have become less adequate through time. Some suggested policies are provided which help to return the original adequacy of family payments and lower child poverty rates.

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