Question

Sergio and Isabella are currently working full-time jobs. They are about to have their first child and are trying to decide if they are both going to keep working. What disadvantage will likely face if they choose a dual income option?

You Answered
They will have a lower amount of dispensable income.
They will have a greater amount of financial income.
Correct Answer
They will have a higher amount of childcare expenses.
They will have more time to spend with their new baby.

CORRECT: They will have a higher amount of childcare expenses. (please remove incorrect answers.)

Answer 1

A dual income household with a new child is likely to face increased childcare expenses, reduced economic gains due to additional costs, and potential impacts on leisure time which contribute to a poverty trap.

Step-by-step explanation:

If Sergio and Isabella, who are expecting their first child, decide to maintain a dual income household by both working full-time jobs, they are likely to face increased childcare expenses. This is because working parents must often pay for childcare services to care for their newborn during working hours, which can represent a significant portion of their income, sometimes acting as a regressive tax on work. This pressure is compounded when considering the additional expenses such as clothing, transportation, and the potential impact on leisure time which could be spent with their new baby. Moreover, the economic gains from both parents working are reduced due to these extra costs, thereby contributing to what is known as the poverty trap, especially for mothers who traditionally take on the role of caregivers.