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Income Transfers, Welfare and Family Decisions

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Author Info
Joaquín Andaluz () (University of Zaragoza)
Miriam Marcén () (University of Zaragoza)
José Alberto Molina () (University of Zaragoza and IZA)

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Abstract

This paper studies the effects of different income transfers on individual welfare, in both marriage and divorce situations, and on family decisions. We assume three generations within the family. We develop a sequential game that, in a first stage, determines the optimum level of the transfer within a relationship of one-sided altruism. In the second stage, the level of welfare is deduced by way of a Nash bargaining solution. We show that intergenerational transfers may produce losses derived from the marriage. We have also found that the donor of an intergenerational transfer can behave in a compensatory way in an altruism model.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2804.

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Length: 23 pages
Date of creation: May 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2804

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Related research
Keywords: income transfers; welfare; marriage; Nash-bargaining; family decisions;

Other versions of this item:

Find related papers by JEL classification:
D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
D64 - Microeconomics - - Welfare Economics - - - Altruism
D10 - Microeconomics - - Household Behavior - - - General
C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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References listed on IDEAS
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  12. Ben-Porath, Yoram, 1973. "Economic Analysis of Fertility in Israel: Point and Counterpoint," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S202-33, Part II, . [Downloadable!] (restricted)
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  30. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January. [Downloadable!] (restricted)
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This page was last updated on 2009-11-23.


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