The latest status symbol of the 1% is a third kid. ‘It has become rarer for everyone else,’ says an economist

Over the past few decades, the symbols of extreme wealth have remained consistent: second homes, luxury vehicles, and prestigious educations. However, a more subtle indicator of the top 1% has emerged: the presence of a third child. Mike Konczal, a former White House economist now at the Economic Security Project, analyzed Federal Reserve data and discovered that 49% of top-1% earners have three or more children, compared to around 40% among the broader top 10%.

The disparity lies in the third child: 34% of the wealthiest individuals stop at exactly three, while 24% of the merely affluent do. This change is not observed among the rest of the top 10% or among families with four or more children. The trend of having three or more children has become more rare among the affluent, especially in the upper middle class.

Families wealthier than the top 25% of Americans, but still below the 1%, are less likely to have three children. This gap can be attributed to financial constraints, as full-day care for a child costs between $6,552 and $15,600 per year, which can be as high as 16% of a median family income. Additionally, larger families often necessitate bigger homes, with the typical existing single-family home selling for $412,500 in 2024, about five times the median household income in 1990s.

The implications of this trend extend beyond family budgets, as a declining birth rate could lead to a smaller future workforce, slower economic growth, and increased strain on Social Security.