Article

Lifestyles

, Volume 10, Issue 3, pp 233-248

The use of savings as a family resource management strategy to meet child rearing costs

  • Robin A. DouthittAffiliated withUniversity of Wisconsin-Madison
  • , Joanne M. FedykAffiliated withUniversity of Saskatchewan

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Abstract

This study examines the effect of children on family savings decisions over the life cycle. The model used is a multinomial logit budget share allocation model. The data are from the 1982 Canadian Family Expenditure Survey Data. Results indicate that the addition of a child to a family results in fewer assets being accumulated than if the child was not present. As much as 43% of direct child rearing costs may be met through this substitution out of future consumption. Closer analysis reveals that accrual of housing equity is relatively unaffected by child's presence and that substitutions occur primarily out of other types of savings instruments.

Key words

Children The Cost of Family Size Savings