The Psychic Cost of Children
(together with Hielke Buddelmeyer and Daniel Hamermesh)
We use longitudinal data on couples in Australia covering the period 2001 to 2012, and in Germany for 2002 to 2012, to examine how demographic events affect perceived time and financial stress. Consistent with the view of measures of stress as proxies for the Lagrangean multipliers in models of household production, we show that births increase time stress, especially among mothers, and generally also raise financial stress, with somewhat larger effects of first births. The monetary equivalent of the costs of the extra time stress is very large. While the departure of a child from the home does reduce parents’ time and financial stress, its negative impacts on the tightness of the time and goods constraints are smaller than the positive impacts of a birth.