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Raising Juveniles

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Author Info

  • Bell, Clive

    ()
    (Heidelberg University)

  • Gersbach, Hans

    ()
    (ETH Zurich)

  • Schneider, Maik T.

    ()
    (ETH Zurich)

Abstract

This paper investigates how families make decisions about the education of juveniles. The decision problem is analyzed in three variations: a 'decentralized' scheme, in which the parents control the purse-strings, but the children dispose of their time as they see fit; a 'hierarchical' scheme, in which the parents can enforce a particular level of schooling by employing a monitoring technology; and the cooperative solution, in which the threat point is one of the two noncooperative outcomes. Adults choose which game is played. While the subgame perfect equilibrium of the overall game is Pareto-efficient when viewed statically, it may yield less education than the hierarchical scheme. Regulation in the form of restrictions on child labor and compulsory schooling generally affects both the threat point and the feasible set of bargaining outcomes, and families may choose more schooling than the minimum required by law.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5036.

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Length: 33 pages
Date of creation: Jun 2010
Date of revision:
Publication status: published in: Games and Economic Behavior, 2012, 74 (1), 32-51
Handle: RePEc:iza:izadps:dp5036

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Keywords: human capital; youth; family decision-making; bargaining;

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References

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  1. Galor, Oded & Zeira, Joseph, 1988. "Income Distribution and Macroeconomics," MPRA Paper 51644, University Library of Munich, Germany, revised 01 Sep 1989.
  2. Bell, Clive & Gersbach, Hans & Schneider, Maik T., 2012. "Raising juveniles," Games and Economic Behavior, Elsevier, vol. 74(1), pages 32-51.
  3. Gersbach, Hans & Siemers, Lars, 2005. "Land Reforms and Economic Development," CEPR Discussion Papers 5184, C.E.P.R. Discussion Papers.
  4. BARHAM, Vicky & BOADWAY, Robin & MARCHAND, Maurice & PESTIEAU, Pierre, 1992. "Education and the poverty trap," CORE Discussion Papers 1992010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. James J. Heckman, 2008. "Schools, Skills, and Synapses," NBER Working Papers 14064, National Bureau of Economic Research, Inc.
  6. Banerjee, Abhijit V., 2004. "Educational policy and the economics of the family," Journal of Development Economics, Elsevier, vol. 74(1), pages 3-32, June.
  7. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1.
  8. Pollak, Robert, 2007. "Family Bargaining and Taxes: A Prolegomenon to the Analysis of Joint Taxation," IZA Discussion Papers 3109, Institute for the Study of Labor (IZA).
  9. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June.
  10. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
  11. Shelly Lundberg & Jennifer Romich & Kwok Tsang, 2009. "Decision-making by children," Review of Economics of the Household, Springer, vol. 7(1), pages 1-30, March.
  12. Bergstrom, Theodore C, 1989. "A Fresh Look at the Rotten Kid Theorem--and Other Household Mysteries," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1138-59, October.
  13. Bell, Clive & Gersbach, Hans, 2009. "Child Labor And The Education Of A Society," Macroeconomic Dynamics, Cambridge University Press, vol. 13(02), pages 220-249, April.
  14. Moshe Hazan & Binyamin Berdugo, 2005. "Child Labor, Fertility and Economic Growth," Development and Comp Systems 0507002, EconWPA.
  15. Dessy, Sylvain E., 2000. "A defense of compulsive measures against child labor," Journal of Development Economics, Elsevier, vol. 62(1), pages 261-275, June.
  16. Cox, Donald & Jakubson, George, 1995. "The connection between public transfers and private interfamily transfers," Journal of Public Economics, Elsevier, vol. 57(1), pages 129-167, May.
  17. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
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Cited by:
  1. Bell, Clive & Gersbach, Hans & Schneider, Maik T., 2012. "Raising juveniles," Games and Economic Behavior, Elsevier, vol. 74(1), pages 32-51.

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