The Impact of Children on Australian Couples’ Wealth Accumulation

12 Pages Posted: 5 Jun 2015

See all articles by Alfred Michael Dockery

Alfred Michael Dockery

Curtin University - School of Economics and Finance; Curtin University - Centre for Research in Applied Economics; Bankwest Curtin Economics Centre

Sherry Bawa

Curtin University - School of Economics and Finance

Date Written: June 2015

Abstract

Existing estimates of the cost of children focus on what parents spend on their children, which has limited relevance to parents’ financial capacity to meet those costs. An alternative indicator of the affordability of children, their impact upon couples’ wealth accumulation, is estimated using the lifecycle model and Australian household panel data. The results suggest children have a very small impact upon wealth accumulation, seemingly at odds with the large ‘costs’ implied from expenditure‐based estimates. In reconciling these highly divergent estimates we argue that the net‐wealth approach is an intuitively more appealing indicator of the financial impost of children.

Suggested Citation

Dockery, Alfred Michael and Bawa, Sherry, The Impact of Children on Australian Couples’ Wealth Accumulation (June 2015). Economic Record, Vol. 91, pp. 139-150, 2015. Available at SSRN: https://ssrn.com/abstract=2614722 or http://dx.doi.org/10.1111/1475-4932.12194

Alfred Michael Dockery (Contact Author)

Curtin University - School of Economics and Finance ( email )

GPO Box U 1987
Perth, Western Australia 6845
Australia

Curtin University - Centre for Research in Applied Economics ( email )

GPO Box U1987
Perth, Western Australia 6845
Australia

Bankwest Curtin Economics Centre ( email )

GPO Box U1987
Perth, WA 6845
Australia
61 8 9266 1744 (Phone)
61 8 9266 2373 (Fax)

HOME PAGE: http://https://bcec.edu.au/

Sherry Bawa

Curtin University - School of Economics and Finance ( email )

GPO Box U 1987
Perth, Western Australia 6845
Australia

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