Raising children is cheaper than you think: The impact of having children on parents' wealth accumulation in Australia
Existing estimates of the cost of children focus on what parents spend on their children, which has limited relevance to parents’ financial capacity to meet those costs. An alternative indicator of the affordability of children - their impact upon couples’ wealth accumulation - is estimated using the life-cycle model and Australian household panel data. The results suggest children have a very small impact upon wealth accumulation, seemingly at odds with the large ‘costs’ implied from expenditure-based estimates in existing studies. In reconciling these highly divergent estimates, we argue that the net-wealth approach is an intuitively more appealing indicator of
the financial cost of having children.
Prof. Michael Dockery is Principal Research Fellow at Curtin Business School, Curtin University. He is also Principal Research Leader of the Population Mobility and Labor Markets project within the Cooperative Research Centre for Remote Economic Participation, and he manages the Student Equity Data and Analysis program for the National Centre for Student Equity in Higher Education in Australia. He has worked extensively as a research academic and as a consultant for government and private organizations, concentrating in the areas of labor economics, the economics of education and training, the school-to-work transition, the links between the labor market and subjective-wellbeing (or ‘happiness’), housing and economic participation and Indigenous socio-economic outcomes. His current research pursuits include family work patterns and the links between Indigenous culture and socio-economic outcomes. He has published widely in journals such as the Economic Record, Social Science & Medicine, Social indicators Research, Economics Letters, International Labor Review, Studies in Higher Education, Housing Studies, Economic Papers, and the Australian Journal of Labor Economics, plus a variety of monographs.