Review of Finance Vol. 20 No. 6 2016
Savings and Consumption When Children Move Out
open access
Abstract
We show, using data from the Italian Survey on Household Income and Wealth and the German Socio-economic Panel, that household consumption drops after a child moves out of a household, while at the same time adult-equivalent consumption increases significantly. After all children are gone, parents upgrade their personal lifestyle to a level approximately that of childless peers, 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.
- DOI
- 10.1093/rof/rfv064
- Volume
- 20
- Issue
- 6
- Pages
- 2349-2377
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref