USA’s “Grandparent Economy” Worth $900+ Billion

Credit: National Committee to Preserve Social Security & Medicare

Grandparents are playing a far more active role in their grandchildren’s lives than in prior years, according to a study released in early summer by the American Association of Retired Persons (AARP).

The organization surveyed 3,300 American grandparents, the first such survey since 2018, finding that the average grandparent now spends over 500 hours annually, or 12.5 weeks of full-time work, providing care their grandchildren.

The report describes this “grandparent economy” as “America’s quiet safety net.”

Currently, 35% of American adults above the age of 35, and 50% of adults above the age of 50, are grandparents, for a total of roughly 65 million grandparents in the country.

15% of the country’s grandparents care for their grandchildren on a daily or near-daily basis, and American grandparents spent an average of $2,654 out of pocket on their grandchildren in the previous year, including over $400 on basic necessities and over $700 on gifts.

Additionally, 23% of grandparents told the AARP they spend money to support their grandchildren’s education and extracurricular activities. 

With the combined direct financial support and the unpaid care, the organization estimated that the country’s “grandparent economy” is worth an astounding $904 billion per year.

Survey respondents were asked to describe in their own words the reason they provide care for their grandchildren.

38% reported reasons related to the parents’ jobs or other responsibilities, 35% said it was simply because they loved their grandchildren, and 9% answered that they wanted to pass down values and guidance.

The latter answer was more likely to be named by grandparents who immigrated to the U.S.

83% of those surveyed expresses high levels of joy from their grandparenting experiences, while 80% reported feeling a sense of fulfillment as a result.

In a statement, Debra Whitman, executive vice president and chief public policy officer for AARP, said “America runs on grandparents,” and that “they are really an economic backbone of our country that I don't think many people appreciate."

While most respondents reported that they enjoy caring for their grandchildren, 11% actually feel taken for granted, and 13% feel physically taxed by the care they provide, while 26% feel both taxed and energized by providing care.

Whitman noted that "Grandparents want to spend time their grandkids, but it's a lot to be a full-time caregiver or stepping in and helping out with the bills when you might be struggling yourself."

Furthermore, there is an obvious financial strain that comes with providing the high levels of care currently seen in the U.S. While the average grandparent spends $2,654 annually on their grandchildren, the average monthly Social Security check is closer to $2,000.