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Raising juveniles

  • Bell, Clive
  • Gersbach, Hans
  • Schneider, Maik T.

This paper investigates how families decide how juveniles use their time. The problem is analyzed in three variations: (i) a ‘decentralized’ scheme, in which parents control the main budget, but their children dispose of their time as they see fit, together with any earnings from work on their own account; (ii) ‘hierarchy’, in which parents can enforce, at some cost, particular levels of schooling and supervised work contributing to the main budget; and (iii) the cooperative solution, in which resources are pooled and the threat point is one of the non-cooperative outcomes. Adults choose which game is played. While the subgame perfect equilibrium of the overall game is pareto-efficient, it may yield less education than ‘hierarchy’. Restrictions on child labor and compulsory schooling generally affect both the threat point and the feasible set of bargaining outcomes. Families may choose more schooling than the legal minimum.

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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 74 (2012)
Issue (Month): 1 ()
Pages: 32-51

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Handle: RePEc:eee:gamebe:v:74:y:2012:i:1:p:32-51
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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  1. 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).
  2. 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.
  3. Gersbach, Hans & Siemers, Lars, 2005. "Land Reforms and Economic Development," CEPR Discussion Papers 5184, C.E.P.R. Discussion Papers.
  4. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
  5. Barham, Vicky & Boadway, Robin & Marchand, Maurice & Pestieau, Pierre, 1995. "Education and the poverty trap," European Economic Review, Elsevier, vol. 39(7), pages 1257-1275, August.
  6. James J. Heckman, 2008. "Schools, Skills, and Synapses," NBER Working Papers 14064, National Bureau of Economic Research, Inc.
  7. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-93, Nov.-Dec..
  8. 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.
  9. Moshe Hazan & Binyamin Berdugo, 2005. "Child Labor, Fertility and Economic Growth," Development and Comp Systems 0507002, EconWPA.
  10. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, June.
  11. Bell, Clive & Gersbach, Hans & Schneider, Maik T., 2010. "Raising Juveniles," IZA Discussion Papers 5036, Institute for the Study of Labor (IZA).
  12. 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.
  13. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
  14. Banerjee, Abhijit V., 2004. "Educational policy and the economics of the family," Journal of Development Economics, Elsevier, vol. 74(1), pages 3-32, June.
  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. 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.
  17. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June.
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