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Motives for Investment in Human Capital of Children: Evidence from Indonesian Family Life Survey Data

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  • Lakshmi K Raut
  • Lien H Tran

Abstract

Two alternative models of parental investments in children's human capital are considered and tested empirically using the Indonesian Family Life Survey (IFLS). The pure loan model and the reciprocity with two-sided altruism model yield different predictions about the effect of children's education level and number of children on intergenerational transfers. Using these predictions, a sepcification test is carried out to differentiate these two models with the data. The evidence favors the second model of reciprocity with two-sided altruism.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/88-98/WP_98-1.pdf
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Bibliographic Info

Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 199801.

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Length: 26 pages
Date of creation: 1998
Date of revision:
Handle: RePEc:hai:wpaper:199801

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References

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  1. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
  2. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
  3. Nerlove, Marc & Raut, Lakshmi K., 1993. "Growth models with endogenous population: A general framework," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 20, pages 1117-1174 Elsevier.
  4. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
  5. Lakshmi K. Raut, 1997. "Learning to Perfect Manipulation: Implications for Fertility, Savings, and Old-Age Social Security," Labor and Demography 9705003, EconWPA.
  6. Joseph G. Altonji & Fumio Hayashi & Laurence J. Kotlikoff, 1993. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," NBER Working Papers 3046, National Bureau of Economic Research, Inc.
  7. Lee Lillard & Robert Willis, 1997. "Motives for interqenerational transfers: Evidence from Malaysia," Demography, Springer, vol. 34(1), pages 115-134, February.
  8. Hayashi, Fumio, 1995. "Is the Japanese Extended Family Altruistically Linked? A Test Based on Engel Curves," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 661-74, June.
  9. McGarry, K & Schoeni, R-F, 1996. "Measurement and the Redistribution of Resources Within the Family," Papers 96-11, RAND - Reprint Series.
  10. Becker, Gary S & Lewis, H Gregg, 1973. "On the Interaction between the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S279-88, Part II, .
  11. Raut, L. K., 1990. "Capital accumulation, income distribution and endogenous fertility in an overlapping generations general equilibrium model," Journal of Development Economics, Elsevier, vol. 34(1-2), pages 123-150, November.
  12. Behrman, Jere R & Pollak, Robert A & Taubman, Paul, 1982. "Parental Preferences and Provision for Progeny," Journal of Political Economy, University of Chicago Press, vol. 90(1), pages 52-73, February.
  13. Cox, Donald, 1990. "Intergenerational Transfers and Liquidity Constraints," The Quarterly Journal of Economics, MIT Press, vol. 105(1), pages 187-217, February.
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Cited by:
  1. Yacouba Diallo, 2001. "Les déterminants du travail des enfants en Côte d'Ivoire," Documents de travail 55, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
  2. Roland Veras Saldanha Júnior & Priscila Azzolini, 2001. "Estoque de Conhecimento, Incerteza e Investimento em Educação: um Modelo Teórico," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 104, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].

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