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The Impact of Children on Australian Couples’ Wealth Accumulation

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  • Alfred Michael Dockery
  • Sherry Bawa

Abstract

Existing estimates of the cost of children focus on what parents spend on their children, which has limited relevance to parents’ financial capacity to meet those costs. An alternative indicator of the affordability of children, their impact upon couples’ wealth accumulation, is estimated using the lifecycle model and Australian household panel data. The results suggest children have a very small impact upon wealth accumulation, seemingly at odds with the large ‘costs’ implied from expenditure‐based estimates. In reconciling these highly divergent estimates we argue that the net‐wealth approach is an intuitively more appealing indicator of the financial impost of children.

Suggested Citation

  • Alfred Michael Dockery & Sherry Bawa, 2015. "The Impact of Children on Australian Couples’ Wealth Accumulation," The Economic Record, The Economic Society of Australia, vol. 91(S1), pages 139-150, June.
  • Handle: RePEc:bla:ecorec:v:91:y:2015:i:s1:p:139-150
    DOI: 10.1111/1475-4932.12194
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    References listed on IDEAS

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    Cited by:

    1. Michelle Maroto, 2018. "Saving, Sharing, or Spending? The Wealth Consequences of Raising Children," Demography, Springer;Population Association of America (PAA), vol. 55(6), pages 2257-2282, December.

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    More about this item

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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