Resumen de Demand, chilbirth and the costs of babies: evidence from spanish panel data

Ian Preston, Juan Alberto Sanchis Llopis, José María Labeaga Azcona

• The aim of this paper is to address the question of how children affect household life-cycle expenditure patterns in the surrounding of childbirth date. During this period some potentially important changes are taking place in the household: changing needs (nutrition effects, children clothing), changes in relation to labour supply (specially for the mother) and other possible changes due to the anticipation of the family to the event (saving and/or borrowing). An interesting issue in this context is the concept of intertemporal demographic separability and its relation to Rothbarth demographic separability and the measurement of child costs. To investigate this we estimate a Frisch demand system taking special care about the definition of a set of dummies capturing the arrival of a new child in the household. We use a panel of households drawn from the Spanish Family Expenditure Survey for the period 1985-1995. Among the main results, we must emphasise that while we observe important jumps in the consumption of some children related goods (clothing, entertainment and food), we observe no changes in the so called adult goods.