Family size, household production, and life cycle saving

"Changing family size and labour-leisure choice are introduced into a life cycle model. Saving corresponds with empirical observation in some ways better, and in others worse, as a result. Changing family size reduces aggregate saving and generates substantial dissaving at peak size, indicating that bequests, uncertainty, and liquidity constraints should also be modelled. However, the age profile of consumption is humped, and labour-leisure choice produces a drop in consumption on retirement, both corresponding well with observation." (SUMMARY IN FRE)