The Impact of Children on Australian Couples’ Wealth Accumulation
JournalEconomic Record
AuthorsMichael Dockery, Sherry Bawa
PublishedMay 2015
PublisherWileys Online Publication
DOI10.1111/1475-4932.12194
Number of Pages139-150
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.
The Bankwest Curtin Economics Centre team acknowledges the Wadjuk Nyungar people as the traditional owners of the land on which the Centre is situated.