It’s Not Luxury Cars or Designer Bags. Having Three Kids May Be The New Sign Of Wealth.

Expensive cars, designer handbags or sprawling vacation homes are some of the most common signs of wealth. But a new difference between America’s richest families and everyone else may be something far more ordinary: a third child.

Nearly half of families in the top 1% of the income distribution have at least three children, compared with about 40% of other families in the top 10%, according to a new analysis of Federal Reserve data.

The findings, published October 19 by economist Mike Konczal, suggest that larger families have become increasingly associated with the country’s highest earners, even as having three or more children has become less common across much of the income distribution.

The distinction is particularly striking because it separates the very wealthy from Americans who are already among the nation’s highest-income households.

Konczal, vice president of the Economic Security Project, examined data from the Federal Reserve’s Survey of Consumer Finances, combining five surveys conducted between 2013 and 2025.

His analysis focused on families headed by adults aged 45 to 64, allowing him to capture children who had already moved out of their parents’ homes.

Among families in the highest-earning 1%, approximately 34% had exactly three children. That compared with 24% among other families in the top 10%.

Interestingly, the difference was not driven by families having four or more children, which were about equally common in both income groups.

The pattern also appeared when households were ranked by net worth rather than income. Half of families in the wealthiest 1% had at least three children, compared with approximately 37% of other families in the top 10% by wealth.

The average number of children among the wealthiest 1% was 2.52, compared with 2.25 among the remaining households in the top wealth decile. That difference was statistically significant, according to Konczal’s calculations.

Perhaps the most surprising finding is that the wealthiest Americans have not dramatically increased their family sizes. Instead, the gap appears to have widened because larger families have become less common among everyone else.

Konczal compared the recent survey results with data from the 1990s and found that the estimated share of top-1% families with three or more children had changed relatively little, although those historical estimates carried considerable uncertainty.

Among other income groups, including affluent households below the top 1%, the proportion raising larger families declined. Across most of the income distribution above the bottom 10%, the recent share of families with at least three children was relatively flat, generally ranging from about 37% to 43%. It rose to 49% at the very top.

The findings challenge the traditional assumption that higher incomes are associated with smaller families. However, they do not establish that wealth directly causes people to have more children. Personal preferences, family circumstances, cultural differences and other factors can also influence family size.

For parents considering another child, the additional expenses can extend well beyond diapers, groceries and school supplies. A third child may require a larger home, additional childcare arrangements, more expensive transportation and changes to working schedules. Those costs can be especially significant when both parents work and depend on paid childcare.

A U.S. Census Bureau study published in May found that 23.9% of households with children aged 13 or younger paid for childcare in 2024. Among those households, average annual childcare expenses reached $10,520, accounting for 5.6% of household income.

The research also examined how families responded when childcare became unavailable or inadequate. Although only 3.7% of households reported difficulties obtaining adequate care, those affected lost an average of 65.8 days of work time.

Higher-income households were more likely to manage disruptions through paid leave, while lower-income households were more likely to withdraw from the labor market.

For families with several young children, maintaining two careers while managing childcare arrangements can be a substantial financial and logistical challenge.

Wealthier parents may have greater flexibility to pay for additional help, take time away from work or absorb unexpected expenses without significantly disrupting their finances.

The latest Federal Reserve Survey of Consumer Finances, released October 9, offers broader context for the financial pressures facing American households.

Inflation-adjusted median family income increased 7% between 2022 and 2025, reaching $82,200. Median family net worth rose 2% over the same period to $215,900, while average net worth increased 7% to $1.24 million. Yet financial obligations remain substantial for some households.

The proportion of families spending more than 40% of their income on debt payments climbed from 6.5% in 2022 to 8.6% in 2025, a level last recorded in the 2013 survey.

The figures illustrate how improvements in household income and wealth can coexist with financial strain, although they do not directly explain differences in family size.

That said, the analysis has limitations. It combines household child counts with children living elsewhere, which can introduce some double-counting, particularly in blended families. However, Konczal found that the gap between the richest households and other affluent families remained statistically significant under alternative counting methods.