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Using Time-Use Data to Estimate the Full Costs of Children

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  • Bruce Bradbury

    (Social Policy Research Centre, UNSW)

Abstract

This paper uses the 'adult goods' method to estimate the full costs of children. Full costs include both expenditure and time costs. Adult personal time (comprising pure leisure, sleep and other personal care) is used as the adult good. Previous research has shown that the presence of children in the household leads to a reduction in adult personal time. This paper develops a simple household economic model to show how this information can be used to develop an equivalence scale for adult consumption which takes account of both the expenditure and time costs of children. Preliminary estimates using Australian data suggest a very large cost. A couple with two children (one of which is in pre-school) require an income around 2.7 times as large as a couple with no children in order for the adults to have the same consumption level. The full cost of children appears to decline with age (despite the expenditure cost rising). The paper discusses the limitations of the adult good method and considers the broader welfare implications of these costs while taking into account the benefits that parents obtain from parenthood.

Suggested Citation

  • Bruce Bradbury, 2004. "Using Time-Use Data to Estimate the Full Costs of Children," Labor and Demography 0411002, EconWPA.
  • Handle: RePEc:wpa:wuwpla:0411002 Note: Type of Document - pdf; pages: 21
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    File URL: http://econwpa.repec.org/eps/lab/papers/0411/0411002.pdf
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    References listed on IDEAS

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    1. Bradbury, Bruce, 1994. "Measuring the Cost of Children," Australian Economic Papers, Wiley Blackwell, vol. 33(62), pages 120-138, June.
    2. Timothy Smeeding & Gunther Schmaus & Brigitte Buhmann & Lee Rainwater, 1988. "Equivalence Scales, Well-Being, Inequality and Poverty: Sensitivity Estimates Across Ten Countries Using the LIS Database," LIS Working papers 17, LIS Cross-National Data Center in Luxembourg.
    3. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
    4. Paul A. Samuelson, 1956. "Social Indifference Curves," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 1-22.
    5. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics,in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier.
    6. Nelson, Julie A, 1992. "Methods of Estimating Household Equivalence Scales: An Empirical Investigation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 38(3), pages 295-310, September.
    7. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 720-744, August.
    8. Pencavel, John, 1987. "Labor supply of men: A survey," Handbook of Labor Economics,in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 1, pages 3-102 Elsevier.
    9. Nelson, Julie A, 1988. "Household Economies of Scale in Consumption: Theory and Evidence," Econometrica, Econometric Society, vol. 56(6), pages 1301-1314, November.
    10. Buhmann, Brigitte, et al, 1988. "Equivalence Scales, Well-Being, Inequality, and Poverty: Sensitivity Estimates across Ten Countries Using the Luxembourg Income Study (LIS) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-142, June.
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    Citations

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    Cited by:

    1. Alex Sienaert, 2008. "Some Child Cost Estimates for South Africa," CSAE Working Paper Series 2008-15, Centre for the Study of African Economies, University of Oxford.
    2. Alex Sienaert, 2008. "Some Child Cost Estimates for South Africa," Economics Series Working Papers WPS/2008-15, University of Oxford, Department of Economics.
    3. Mattila-Wiro, Päivi, 2006. "Changes in the Distribution of Economic Wellbeing in Finland," Research Reports 128, VATT Institute for Economic Research.

    More about this item

    Keywords

    consumer equivalence scales; cost of children; time-use; adult goods;

    JEL classification:

    • J - Labor and Demographic Economics

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