Life-Cycle Consumption and Children: Evidence from a Structural Estimation

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Standard

Life-Cycle Consumption and Children : Evidence from a Structural Estimation. / Jørgensen, Thomas Høgholm.

In: Oxford Bulletin of Economics and Statistics, Vol. 79, No. 5, 10.2017, p. 717–746 .

Research output: Contribution to journal › Journal article › Research › peer-review

Harvard

Jørgensen, TH 2017, 'Life-Cycle Consumption and Children: Evidence from a Structural Estimation', Oxford Bulletin of Economics and Statistics, vol. 79, no. 5, pp. 717–746 . https://doi.org/10.1111/obes.12170

APA

Jørgensen, T. H. (2017). Life-Cycle Consumption and Children: Evidence from a Structural Estimation. Oxford Bulletin of Economics and Statistics, 79(5), 717–746 . https://doi.org/10.1111/obes.12170

Vancouver

Jørgensen TH. Life-Cycle Consumption and Children: Evidence from a Structural Estimation. Oxford Bulletin of Economics and Statistics. 2017 Oct;79(5):717–746 . https://doi.org/10.1111/obes.12170

Author

Jørgensen, Thomas Høgholm. / Life-Cycle Consumption and Children : Evidence from a Structural Estimation. In: Oxford Bulletin of Economics and Statistics. 2017 ; Vol. 79, No. 5. pp. 717–746 .

Bibtex

@article{ad6bb050c44c478bb49e9dc61f25c323,
title = "Life-Cycle Consumption and Children: Evidence from a Structural Estimation",
abstract = "I estimate by maximum likelihood a dynamic model of optimal intertemporal allocation of consumption in the presence of children using high-quality Danish longitudinal data. The number and age of all children can affect the marginal utility of consumption while income uncertainty, credit constraints and postretirement motives also influence household behaviour. While I estimate that children have a surprisingly small effect on the marginal utility of non-durable consumption, data simulated from the estimated model replicates similar correlations between log consumption growth and changing household composition as found in the Danish data and typically found in UK and US data. To reconcile the results with existing studies, I illustrate how ignoring precautionary motives increases the estimated importance of children. The results indicate that precautionary motives might play a larger role than children in explaining the observed consumption age profile.",
keywords = "Faculty of Social Sciences, D12, D14, D91",
author = "J{\o}rgensen, {Thomas H{\o}gholm}",
year = "2017",
month = oct,
doi = "10.1111/obes.12170",
language = "English",
volume = "79",
pages = "717–746 ",
journal = "Oxford Bulletin of Economics and Statistics",
issn = "0305-9049",
publisher = "Wiley-Blackwell",
number = "5",

}

RIS

TY - JOUR

T1 - Life-Cycle Consumption and Children

T2 - Evidence from a Structural Estimation

AU - Jørgensen, Thomas Høgholm

PY - 2017/10

Y1 - 2017/10

N2 - I estimate by maximum likelihood a dynamic model of optimal intertemporal allocation of consumption in the presence of children using high-quality Danish longitudinal data. The number and age of all children can affect the marginal utility of consumption while income uncertainty, credit constraints and postretirement motives also influence household behaviour. While I estimate that children have a surprisingly small effect on the marginal utility of non-durable consumption, data simulated from the estimated model replicates similar correlations between log consumption growth and changing household composition as found in the Danish data and typically found in UK and US data. To reconcile the results with existing studies, I illustrate how ignoring precautionary motives increases the estimated importance of children. The results indicate that precautionary motives might play a larger role than children in explaining the observed consumption age profile.

AB - I estimate by maximum likelihood a dynamic model of optimal intertemporal allocation of consumption in the presence of children using high-quality Danish longitudinal data. The number and age of all children can affect the marginal utility of consumption while income uncertainty, credit constraints and postretirement motives also influence household behaviour. While I estimate that children have a surprisingly small effect on the marginal utility of non-durable consumption, data simulated from the estimated model replicates similar correlations between log consumption growth and changing household composition as found in the Danish data and typically found in UK and US data. To reconcile the results with existing studies, I illustrate how ignoring precautionary motives increases the estimated importance of children. The results indicate that precautionary motives might play a larger role than children in explaining the observed consumption age profile.

KW - Faculty of Social Sciences

KW - D12

KW - D14

KW - D91

U2 - 10.1111/obes.12170

DO - 10.1111/obes.12170

M3 - Journal article

VL - 79

SP - 717

EP - 746

JO - Oxford Bulletin of Economics and Statistics

JF - Oxford Bulletin of Economics and Statistics

SN - 0305-9049

IS - 5

ER -

ID: 169358611