Children and Household Utility: Evidence from Kids Flying the Coop

24 Pages Posted: 16 Nov 2010

See all articles by Norma Coe

Norma Coe

University of Pennsylvania - Perelman School of Medicine

Anthony Webb

Boston College - Center for Retirement Research

Date Written: November 1, 2010

Abstract

Using consumption and wealth data from the Health and Retirement Study (HRS), this paper explores the impact of children leaving home on household consumption. We find that households maintain their household-level consumption, despite the fact that the number of individuals in the household has decreased, increasing per-capita consumption. Further, we find no evidence of increases in total net wealth, or any of its components, after children leave the household. These findings suggest that households do not dramatically change their savings or consumption patterns when their children fly the coop. Those households who are already behind in their retirement preparations will remain at risk of entering retirement with insufficient wealth to maintain their pre-retirement standard of living.

Suggested Citation

Coe, Norma and Webb, Anthony, Children and Household Utility: Evidence from Kids Flying the Coop (November 1, 2010). Available at SSRN: https://ssrn.com/abstract=1709627 or http://dx.doi.org/10.2139/ssrn.1709627

Norma Coe (Contact Author)

University of Pennsylvania - Perelman School of Medicine ( email )

423 Guardian Drive
Philadelphia, PA 19104
United States

Anthony Webb

Boston College - Center for Retirement Research ( email )

Fulton Hall 550
Chestnut Hill, MA 02467
United States

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