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Asset Accumulation and Family Size

Author

Listed:
  • James P. Smith

    (RAND Corporation)

  • Michael P. Ward

    (UCLA & RAND Corporation)

Abstract

Utilizing panel data on families, estimates are made of the effects of children on asset accululation, asset composition, consumption, and family income. Young children are found to depress savings for young families but to increase savings for marriages of duration greater than five years. The principal channel through which children act to reduce savings is the decline in female earnings associated with the child- induced withdrawal of wives from the labor force. Family consumption actually decreases with the birth of a child, but this reduction is insufficient, for young families, to offset the fall in income. For families in which the wife does not work the estimates suggest that savings may actually increase with children.

Suggested Citation

  • James P. Smith & Michael P. Ward, 2004. "Asset Accumulation and Family Size," Labor and Demography 0403001, EconWPA.
  • Handle: RePEc:wpa:wuwpla:0403001
    Note: Type of Document - pdf; pages: 18. Demography, Vol. 17, No. 3, August 1980, pp. 243-260
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/lab/papers/0403/0403001.pdf
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    References listed on IDEAS

    as
    1. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters,in: A Theory of the Consumption Function, pages 1-6 National Bureau of Economic Research, Inc.
    2. Smith, James P, 1979. "The Distribution of Family Earnings," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 163-192, October.
    3. Michael R. Darby, 1977. "The Consumer Expenditure Function," NBER Chapters,in: Explorations in Economic Research, Volume 4, number 5, pages 51-80 National Bureau of Economic Research, Inc.
    4. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1, July.
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    Cited by:

    1. Belton, Willie & Uwaifo Oyelere, Ruth, 2008. "The Racial Saving Gap Enigma: Unraveling the Role of Institutions," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 37089, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Deborah A. Cobb-Clark & Vincent A. Hildebrand, 2006. "The Wealth And Asset Holdings Of U.S.-Born And Foreign-Born Households: Evidence From Sipp Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 17-42, March.
    3. Orbeta, Aniceto Jr. C., 2007. "Impact of Children on Household Savings in the Philippines," Philippine Journal of Development PJD 2005 Vol. XXXII No. 2, Philippine Institute for Development Studies.
    4. F. Thomas Juster & Joseph Lupton & James P. Smith & Frank Stafford, 2004. "Savings and Wealth; Then and Now," Labor and Demography 0403027, EconWPA.
    5. James Smith, 1989. "Children Among the Poor," Demography, Springer;Population Association of America (PAA), vol. 26(2), pages 235-248, May.
    6. Grinstein-Weiss, Michal & Hun Yeo, Yeong & Zhan, Min & Charles, Pajarita, 2008. "Asset holding and net worth among households with children: Differences by household type," Children and Youth Services Review, Elsevier, vol. 30(1), pages 62-78, January.
    7. Lucie Schmidt & Purvi Sevak, 2006. "Gender, Marriage, And Asset Accumulation In The United States," Feminist Economics, Taylor & Francis Journals, vol. 12(1-2), pages 139-166.
    8. repec:bla:revinw:v:63:y:2017:i:2:p:378-393 is not listed on IDEAS

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    JEL classification:

    • J - Labor and Demographic Economics

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