Savings and Consumption When Children Move Out
2016
We show, using data from the Italian Survey on
Household Incomeand 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
childlesspeers, and save only a small proportion of the freed-up resources. Since parents had fewer resources to save while they were young, retirement
preparednessamong them is a more serious concern than among
childlessindividuals.
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