Savings and Consumption When Children Move Out

Simon Rottke and Alexander Klos

No 621, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: Based on the Italian Survey on Household Income and Wealth (SHIW) and the German Socio-economic Panel (SOEP), we show that household consumption drops after a child moves out of a household, while at the same time, per capita consumption increases significantly. Parents approximately upgrade their personal lifestyle up to the level of childless peers after all children are gone and save only a small proportion of the freed-up resources. Since parents had fewer resources to save while they were young, retirement preparedness among them is a more serious concern than among childless individuals.

Keywords: Household finance; consumption; savings; children; retirement preparedness (search for similar items in EconPapers)
JEL-codes: D12 D14 (search for similar items in EconPapers)
Pages: 55 p.
Date: 2013
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https://www.diw.de/documents/publikationen/73/diw_01.c.436065.de/diw_sp0621.pdf (application/pdf)

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Working Paper: Saving and Consumption When Children Move Out (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp621

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