Private Income Transfers and Market Incentives
AbstractThe paper introduces labor supply considerations, and labor earnings uncertainty into a parent-child framework in the presence of 'merit goods.' The author investigates the implications of various parental bequest rules on the effort decisions of the offspring, where the parent cannot perfectly observe her child's market activities. The asymmetry in information and preferences gives rise to a moral hazard problem, and as a result the parent may not fully insure her child because the source of risk is not entirely exogenous. In this case, optimal parental transfers are shown to be state-contingent. Moreover, the child's effort is higher in the case with a merit good and parental transfers than in the case without a merit good. Copyright 1998 by The London School of Economics and Political Science
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by London School of Economics and Political Science in its journal Economica.
Volume (Year): 65 (1998)
Issue (Month): 260 (November)
Contact details of provider:
Postal: Houghton Street, London WC2A 2AE
Phone: +44 (020) 7405 7686
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0013-0427
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Yang-Ming Chang & Dennis L. Weisman, 2005. "Sibling Rivalry and Strategic Parental Transfers," Southern Economic Journal, Southern Economic Association, vol. 71(4), pages 821-836, April.
- Ingela Alger & J�rgen W. Weibull, 2010.
"Kinship, Incentives, and Evolution,"
American Economic Review,
American Economic Association, vol. 100(4), pages 1725-58, September.
- Casey Mulligan & Tomas Philipson, .
"Merit Motives and Government Intervention: Public Finance in Reverse,"
University of Chicago - Population Research Center
2000-03, Chicago - Population Research Center.
- Casey B. Mulligan & Tomas J. Philipson, 2000. "Merit Motives and Government Intervention: Public Finance in Reverse," NBER Working Papers 7698, National Bureau of Economic Research, Inc.
- repec:ebl:ecbull:v:9:y:2008:i:13:p:1-10 is not listed on IDEAS
- Yang-Ming Chang, 2012. "Strategic transfers, redistributive fiscal policies, and family bonds: a micro-economic analysis," Journal of Population Economics, Springer, vol. 25(4), pages 1481-1502, October.
- Chami, Ralph & Fischer, Jeffrey H., 2000. "Do private income transfers increase labor market risk?," Economics Letters, Elsevier, vol. 69(2), pages 143-151, November.
- Ana Fernandes, 2011. "Altruism, labor supply and redistributive neutrality," Journal of Population Economics, Springer, vol. 24(4), pages 1443-1469, October.
- Ingela Alger & Jörgen Weibull, 2008.
"The fetters of the sib: Weber meets Darwin,"
- Ingela Alger & Jörgen W. Weibull, 2006.
"Altruism and Climate,"
Boston College Working Papers in Economics
643, Boston College Department of Economics.
- Yang-Ming Chang, 2007. "Transfers and bequests: a portfolio analysis in a Nash game," Annals of Finance, Springer, vol. 3(2), pages 277-295, March.
- Jellal, Mohamed, 2009. "A Theory of Educational Inequality Family and Agency Costs," MPRA Paper 17434, University Library of Munich, Germany.
- François-Charles Wolff & Christine Barnet-Verzat, 2008. "Pocket money and child effort at school," Economics Bulletin, AccessEcon, vol. 9(13), pages 1-10.
- John Ermisch, 2003. "How Do Parents Affect the Life Chances of Their Children as Adults? An Idiosyncratic Review," Social and Economic Dimensions of an Aging Population Research Papers 101, McMaster University.
- Jellal, Mohamed, 2009. "Family Capitalism Corporate Governance Theory," MPRA Paper 17886, University Library of Munich, Germany.
- Fousseynou Bah, 2011. "A Simultaneous Determination of the Inter Vivos Transfer and the Unemployment Duration: the Malian case," Working Papers halshs-00630262, HAL.
- Andaluz, Joaquín & Marcén, Miriam & Molina, José Alberto, 2007. "Income Transfers, Welfare and Family Decisions," IZA Discussion Papers 2804, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.