Children and Household Wealth

  title={Children and Household Wealth},
  author={John Karl Scholz and Ananth Seshadri},
This paper examines the effects of children on consumption and wealth. To anchor intuition, we develop implications using a simple permanent income model with no uncertainty and complete markets. But this framework does not come close to matching the distribution of existing wealth. We therefore examine the effects of children using a rich, augmented life-cycle model, and using a life-cycle model with endogenous fertility. We find that children have a large effect on household’s net worth and… CONTINUE READING