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Savings and Consumption When Children Move Out

  • Simon Rottke
  • Alexander Klos

Based on the Italian Survey on Household Income and Wealth (SHIW) and the German Socio-economic Panel (SOEP), we show that household consumption drops after a child moves out of a household, while at the same time, per capita consumption increases significantly. Parents approximately upgrade their personal lifestyle up to the level of childless peers after all children are gone and save only a small proportion of the freed-up resources. Since parents had fewer resources to save while they were young, retirement preparedness among them is a more serious concern than among childless individuals.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.436065.de/diw_sp0621.pdf
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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 621.

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Length: 55 p.
Date of creation: 2013
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp621
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