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12:30 - 13:45 13 April 2015

Saving and Wealth Accumulation in Anticipation of Having Children


IFS Seminar Room | Institute for Fiscal Studies (link Map)
7 Ridgmount Street | London | WC1E 7AE | United Kingdom

Open to: Academic | Student
Ticketing: Open

Speaker information

Thomas Høgholm Jørgensen

We investigate how fertility expectations affect savings and wealth accumulation behavior. If children increase their parents' marginal utility of consumption, households who expect to have children should accumulate wealth prior to childbirth to be able transfer consumption from periods without children to periods with children. In line with the theory, we find that households in the British Household Panel Survey (BHPS), who expect to have children, save significantly more than those who do not expect to have children. Particularly, childless households who expect to have children save around 50 percent more of their income prior to the first childbirth relative to immediately after childbirth. In comparison, individuals who did not expect to have children save less prior to the (unanticipated) childbirth and subsequently increase saving to compensate for the lacking wealth accumulation in anticipation of having children.


Institute for Fiscal Studies
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