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Do Parental Transfers Reduce Youths' Incentives to Work?

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  • Tao Gong

Abstract

. This paper uses data from the National Longitudinal Survey of Youth 1997 to examine the effects that parental transfers from a family have on a youth's labor supply. The results from a fixed‐effects two‐stage least squares estimator suggest that: (i) parental pocket money reduces youths' incentives to work; (ii) parental allowances have a non‐linear effect on hours worked; (iii) the subsample of siblings shows similar patterns that parental transfers have a negative impact on hours worked, although the magnitudes are slightly weaker than the full sample; and (iv) the response to parental transfers varies by age.

Suggested Citation

  • Tao Gong, 2009. "Do Parental Transfers Reduce Youths' Incentives to Work?," LABOUR, CEIS, vol. 23(4), pages 653-676, December.
    • Handle: RePEc:bla:labour:v:23:y:2009:i:4:p:653-676
    DOI: 10.1111/j.1467-9914.2009.00465.x
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    Cited by:

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    3. Christopher L. Smith, 2011. "Polarization, immigration, education: What's behind the dramatic decline in youth employment?," Finance and Economics Discussion Series 2011-41, Board of Governors of the Federal Reserve System (U.S.).
    4. Yuji Horioka, Charles & Gahramanov, Emin & Hayat, Aziz & Tang, Xueli, 2019. "The Impact of Bequest Motives on Retirement Behavior in Japan: A Theoretical and Empirical Analysis," AGI Working Paper Series 2019-14, Asian Growth Research Institute.
    5. Holford, Angus, 2016. "Do parents tax their children? Teenage labour supply and financial support," ISER Working Paper Series 2016-05, Institute for Social and Economic Research.
    6. Bachmann, Andreas & Boes, Stefan, 2014. "Private transfers and college students’ decision to work," Economics of Education Review, Elsevier, vol. 42(C), pages 34-42.
    7. Horioka, Charles Yuji & Gahramanov, Emin & Hayat, Aziz & Tang, Xueli, 2021. "The impact of bequest motives on labor supply and retirement behavior in Japan: A theoretical and empirical analysis," Journal of the Japanese and International Economies, Elsevier, vol. 62(C).

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