Consumption and Children
AbstractSeveral recent papers have concluded that precautionary saving motives are needed to reconcile data on lifetime patterns of consumption and income with a standard optimising model. In this paper we contest that we necessarily need a precautionary motive and we show that if we take consumption to take proper account of the number and ages of children, then adjusted consumption does not track income. We do not infer from this that children are the sole cause of the rise in consumption in the early part of life but simply that the data we have are not informative enough to convincingly identify the cause of the rise.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2002-06.
Length: 28 pages
Date of creation: Aug 2002
Date of revision:
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consumption; children; precautionary motive; life-cycle;
Other versions of this item:
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
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