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Agency in Family Policy: A Survey

  • Alessandro Cigno

Given that a child's birth and lifetime earning capacity are the result of actions undertaken by the child's own parents, if the government has an interest in the welfare or tax-paying capacity of its future citizens, it has no option but to condition the decisions of its present citizens. Parents are then, in the ordinary sense of the word, the government's agents. They are agents also in the technical sense of Principal-Agent theory if a parental action or personal characterisic of concern to the government is private information. Modelling family policy as an agency problem gives rise to a wealth of new results, and casts doubt on some established ones. (JEL codes: D13, D82, H24, H31, J13, J24) Copyright The Author 2011. Published by Oxford University Press on behalf of Ifo Institute for Economic Research, Munich. All rights reserved. For permissions, please email: journals.permissions@oup.com, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/cesifo/ifr006
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Article provided by CESifo in its journal CESifo Economic Studies.

Volume (Year): 57 (2011)
Issue (Month): 2 (June)
Pages: 305-331

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Handle: RePEc:oup:cesifo:v:57:y:2011:i:2:p:305-331
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  1. Alessandro Cigno & Annalisa Luporini & Anna Pettini, 2000. "Endogenous Fertility And The Design Of Family Taxation," CHILD Working Papers wp03_00, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  2. Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 55-75.
  3. Nava, Mario & Schroyen, Fred & Marchand, Maurice, 1996. "Optimal fiscal and public expenditure policy in a two-class economy," Journal of Public Economics, Elsevier, vol. 61(1), pages 119-137, July.
  4. Nerlove, Marc & Razin, Assaf & Sadka, Efraim, 1993. "Children: A Capital Good or a Base for Income Redistribution Policies," Public Finance = Finances publiques, , vol. 48(Supplemen), pages 78-84.
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