Children and Life-Cycle Consumption

This paper investigates the role of children in explaining life-cycle pattern consumption (which is hump-shaped since it higher middle life and lower at beginning end life). Unlike previous studies, a true panel U.K. households was exploited to investigate whether currently childless that anticipate having behave differently from similar do not children. Spending for each group different ages estimated using simple kernel regression. The finds those children, when compared seem significantly reduce total spending before nor they increase after arrive. Hence, fully explain hump shape over life-cycle.