Consumption by couples rises sharply in the beginning and falls later in life; the causes of the early rise are hotly contested. Among the suggestions are rule of thumb behavior, demographics, liquidity constraints, the precautionary motive, and nonseparabilities between consumption and labor...

This paper develops a model of intrahousehold allocation with endogenous fertility, which captures the relationship between birth order and investment in children. It shows that a birth order effect in intrahouse hold allocation can arise even without assumptions about parental preferences for...