Contemporaneous and intertemporal child costs. Equivalent expenditure vs. equivalent income scales

Abstract

Parents may provide for their children by drawing on savings or borrowing as well as by reducing current consumption. This means that child costs may be partly paid from reducing consumption in periods when the children themselves are not in the family. Static comparisons of consumption costs between households with and without children are therefore affected by the extent to which parents are willing and able to meet child costs through intertemporal transfers. This paper analyses the implications of this argument for the estimation of adult equivalent scales and provides empirical illustrations using individual household data. © 1991.