Journal Article

The Effects of Marital Status and Children on Savings and Portfolio Choice

David A. Love

in The Review of Financial Studies

Published on behalf of The Society for Financial Studies

Volume 23, issue 1, pages 385-432
Published in print January 2010 | ISSN: 0893-9454
Published online April 2009 | e-ISSN: 1465-7368 | DOI: https://dx.doi.org/10.1093/rfs/hhp020
The Effects of Marital Status and Children on Savings and Portfolio Choice

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  • Economics
  • Insurance
  • Intertemporal Choice and Growth
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  • Economics of Health
  • Demographic Economics

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This paper investigates the impact of demographic shocks on optimal decisions about saving, life insurance, and, most centrally, asset allocation. The analysis indicates that marital-status transitions can have important effects on optimal household decisions, particularly in the cases of widowhood and divorce. Children also play a fundamental role in portfolio choice; in addition to leading to substantially different average allocations, they also have strong interaction effects with changes in marital status. Panel data evidence on stockholding suggests that changes in marital status and children matter empirically as well, but not always in the manner that the model predicts.

Keywords: G11; G22; D91; E21; I10; J12

Journal Article.  23993 words.  Illustrated.

Subjects: Economics ; Insurance ; Intertemporal Choice and Growth ; Macroeconomics: Consumption, Saving, Production, Employment, and Investment ; Economics of Health ; Demographic Economics

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