The impact of children on household saving: Age effects versus family size

Summary

This paper extends a recent article by Allen Kelley, ‘Population Growth, the Dependency Rate, and the Pace of Economic Development’, published in Population Studies, 27, 3. Its objectives are threefold: (1) to point out that Kelley's earlier assessment of the effect of family size on household savings rates turns on somewhat arbitrary methods of computation and is altered when more conventional procedures are used, (2) to argue that in modern American society the savings behaviour of families may be tied more to the ages of the children than to their number, and (3) to provide some comparative evidence which tends to substantiate Kelley's conjecture that the way and extent to which children influence household savings patterns depends upon the underlying level of economic development.