IDEAS home Printed from https://ideas.repec.org/a/ers/journl/vxxiiiy2020i2p98-120.html
   My bibliography  Save this article

The Child as a Family Asset? The Modelling of the Family' Economic Loss in Case of Premature Child Death

Author

Listed:
  • Ilona Kwiecien
  • Anna Jedrzychowska

Abstract

Purpose: EU policy investing in children involves a social assessment of the high value of household spending on having and bringing up children. Therefore, the question arises as to what loss the household as investor will bear in the event of the child's death, and what the economic value of the child. The research questions are as follows: How to assess the economic importance, economic value of a child in a household? What factors influence this economic value? Is it necessary to model it in time? Design/Methodology/Approach: We present the loss suffered by a household as a result of a child's death, based on selected economic theories and concepts for estimating human life and goods, assuming the child is a good of a given value. We build the model using financial mathematics, discounted cash flow calculations, annuity calculations, as well as social elements and intergenerational transfers. Findings: The obtained results indicate the high economic value of the child for the current, but also - and even the most - the future economic situation of the household. The compensatory awards in liability cases do not cover even the expenses incurred for the lost asset. It may lead to financial instablity of individual and externalisation of loss, especially when it comes to support during old age. Practical Implications: The modelling concept could determine the minimum economic and ethical value of the child from the point of view of the household and allow evaluation in the financial decisions and loss compensation instruments areas, such as life insurance, liablity claims or the systemic policy of supporting fertility and investing in children. Originality/Value: The study offers an in-depth insight into modelling of the household financial loss and valuation of the child.

Suggested Citation

  • Ilona Kwiecien & Anna Jedrzychowska, 2020. "The Child as a Family Asset? The Modelling of the Family' Economic Loss in Case of Premature Child Death," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 98-120.
    • Handle: RePEc:ers:journl:v:xxiii:y:2020:i:2:p:98-120
    as

    Download full text from publisher

    File URL: https://www.ersj.eu/journal/1582/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Marie-Thérèse Letablier & Angela Luci & Antoine Math & Olivier Thévenon, 2009. "The costs of raising children and the effectiveness of policies to support parenthood in European countries: a Literature Review," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00408899, HAL.
    2. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    3. Wolff, Francois-Charles & Laferrere, Anne, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 13, pages 889-969, Elsevier.
    4. Serah Shin & Hyungsoo Kim, 2018. "Health Trajectories of Older Americans and Medical Expenses: Evidence from the Health and Retirement Study Data Over the 18 Year Period," Journal of Family and Economic Issues, Springer, vol. 39(1), pages 19-33, March.
    5. Thomas R. Ireland, 1990. "Loss in the Death of a Child: An Extension of the Ward Analysis," Journal of Forensic Economics, National Association of Forensic Economics, vol. 3(2), pages 73-77, April.
    6. Gary S. Becker, 1960. "An Economic Analysis of Fertility," NBER Chapters, in: Demographic and Economic Change in Developed Countries, pages 209-240, National Bureau of Economic Research, Inc.
    7. Gary S. Becker, 1975. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition," NBER Books, National Bureau of Economic Research, Inc, number beck75-1, June.
    8. John O. Ward, 1989. "Estimating Economic Loss in the Case of a Death of a Child," Journal of Forensic Economics, National Association of Forensic Economics, vol. 2(3), pages 19-29, August.
    9. Thomas R. Ireland & John O. Ward, 1994. "Valuing The Life Of A Child: Broadening The Investment Approach," Journal of Forensic Economics, National Association of Forensic Economics, vol. 7(2), pages 179-191, April.
    10. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, vol. 101(408), pages 1163-1178, September.
    11. repec:reg:rpubli:282 is not listed on IDEAS
    12. Blomquist, Glenn, 1981. "The Value of Human Life: An Empirical Perspective," Economic Inquiry, Western Economic Association International, vol. 19(1), pages 157-164, January.
    13. Krzysztof Jajuga & Hermann Locarek-Junge & Lucjan T. Orłowski & Karsten Staehr (ed.), 2019. "Contemporary Trends and Challenges in Finance," Springer Proceedings in Business and Economics, Springer, number 978-3-030-15581-0, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. James J. Heckman, 2015. "Introduction to A Theory of the Allocation of Time by Gary Becker," Economic Journal, Royal Economic Society, vol. 0(583), pages 403-409, March.
    2. Deborah A. Cobb-Clark & Nicolás Salamanca & Anna Zhu, 2019. "Parenting style as an investment in human development," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(4), pages 1315-1352, October.
    3. Olivier Thévenon & Angela Luci, 2012. "Reconciling Work, Family and Child Outcomes: What Implications for Family Support Policies?," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 31(6), pages 855-882, December.
    4. Fullerton, Thomas M., Jr. & Walke, Adam G. & Villavicencio, Diana, 2015. "An Econometric Approach for Modeling Population Change in Doña Ana County, New Mexico," MPRA Paper 71141, University Library of Munich, Germany, revised 28 Jan 2015.
    5. Edward P. Lazear, 2000. "Economic Imperialism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(1), pages 99-146.
    6. Hickson, Kerry Jane, 2009. "The contribution of increased life expectancy to economic development in twentieth century Japan," Journal of Asian Economics, Elsevier, vol. 20(4), pages 489-504, September.
    7. Zachary Winkle & Christiaan Monden, 2022. "Family Size and Parental Wealth: The Role of Family Transfers in Europe," European Journal of Population, Springer;European Association for Population Studies, vol. 38(3), pages 401-428, August.
    8. Aeggarchat Sirisankanan, 2020. "Credit constraints and the trade‐off between family size and children's investment in Thailand," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 34(2), pages 133-151, November.
    9. Khalil, Umair, 2017. "Do more guns lead to more crime? Understanding the role of illegal firearms," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 342-361.
    10. Kristinn Hermannsson & Patrizio Lecca, 2016. "Human Capital in Economic Development: From Labour Productivity to Macroeconomic Impact," Economic Papers, The Economic Society of Australia, vol. 35(1), pages 24-36, March.
    11. Dimitris Pavlopoulos & Ruud Muffels & Jeroen K. Vermunt, 2009. "Training and Low‐pay Mobility: The Case of the UK and the Netherlands," LABOUR, CEIS, vol. 23(s1), pages 37-59, March.
    12. Koji Yasuda & Tomoko Kinugasa & Shigeyuki Hamori, 2019. "An Empirical Analysis Of Marital Status In Japan," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(03), pages 773-798, June.
    13. Asch, Beth J & Warner, John T, 2001. "A Theory of Compensation and Personnel Policy in Hierarchical Organizations with Application to the United States Military," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 523-562, July.
    14. Dettling, Lisa J. & Kearney, Melissa S., 2014. "House prices and birth rates: The impact of the real estate market on the decision to have a baby," Journal of Public Economics, Elsevier, vol. 110(C), pages 82-100.
    15. Stephen Drinkwater, 2003. "Go West? Assessing the willingness to move from Central and Eastern European Countries," School of Economics Discussion Papers 0503, School of Economics, University of Surrey.
    16. Libertad González & Sofia Karina Trommlerová, 2023. "Cash Transfers and Fertility: How the Introduction and Cancellation of a Child Benefit Affected Births and Abortions," Journal of Human Resources, University of Wisconsin Press, vol. 58(3), pages 783-818.
    17. Thomas Baudin & Robert Stelter, 2022. "The rural exodus and the rise of Europe," Journal of Economic Growth, Springer, vol. 27(3), pages 365-414, September.
    18. Glenn Jenkins & Chun-Yan Kuo & Arnold C. Harberger, 2011. "Cost-Benefit Analysis for Investment Decisions: Chapter 15 (Cost-Effectiveness and Cost-Utility Analysis)," Development Discussion Papers 2011-15, JDI Executive Programs.
    19. Nijkamp, P. & Stough, R. & Sahin, M., 2009. "Impact of social and human capital on business performance of migrant entrepreneurs - a comparative dutch-us study," Serie Research Memoranda 0017, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    20. Muhammad Rafiq & Mir Kalan Shah, 2010. "The Value of Reduced Risk of Injury and Deaths in Pakistan—Using Actual and Perceived Risk Estimates," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 823-837.

    More about this item

    Keywords

    Economic loss; family behaviour; household finance management; child value.;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G50 - Financial Economics - - Household Finance - - - General
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:xxiii:y:2020:i:2:p:98-120. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ersj.eu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.