Labeling Effects of Child Benefits on Family Savings
Contrary to standard microeconomic principles, it is by now well understood that income is not fungible. For example, the label of a government transfer can induce individuals to make expenditure decisions that are skewed towards the label. In this paper, we show that child benefits are disproportionately used for savings assignable to children. We exploit a policy reform in a difference-in-differences approach to estimatethe effect of child benefits on savings while holding total household income constant.Our results suggest a significant positive labeling effect on long-term savings, but noeffect on assignable consumption. We conclude that labeling effects should be consideredcarefully by policy makers, if not for nudging individuals, then to avoidaffecting decisions unintentionally.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Postal: Poschingerstrasse 5, 81679 Munich|
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo-group.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Susin, Scott, 2002. "Rent vouchers and the price of low-income housing," Journal of Public Economics, Elsevier, vol. 83(1), pages 109-152, January.
- Nicholas Barberis & Ming Huang & Richard H. Thaler, 2006. "Individual Preferences, Monetary Gambles, and Stock Market Participation: A Case for Narrow Framing," American Economic Review, American Economic Association, vol. 96(4), pages 1069-1090, September.
- Johannes Abeler & Felix Marklein, 2010.
"Fungibility, Labels and Consumption,"
2010-13, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- Johannes Abeler & Felix Marklein, 2010. "Fungibility, Labels and Consumption," Discussion Papers 2010-13, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- Abeler, Johannes & Marklein, Felix, 2008. "Fungibility, Labels, and Consumption," IZA Discussion Papers 3500, Institute for the Study of Labor (IZA).
- Paul Gregg & Susan Harkness & Sarah Smith, 2009.
"Welfare Reform and Lone Parents in the UK,"
Royal Economic Society, vol. 119(535), pages F38-F65, 02.
- Gabrielle Fack, 2006.
"Are housing benefit an effective way to redistribute income? Evidence from a natural experiment in France,"
- Fack, Gabrielle, 2006. "Are housing benefit an effective way to redistribute income? Evidence from a natural experiment in France," Labour Economics, Elsevier, vol. 13(6), pages 747-771, December.
- Edwin Deutsch & Horst Tomann, 1995. "Home Ownership Finance in Austria and Germany," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 23(4), pages 441-474.
- Duncan Thomas, 1994.
"Like Father, like Son; Like Mother, like Daughter: Parental Resources and Child Height,"
Journal of Human Resources,
University of Wisconsin Press, vol. 29(4), pages 950-988.
- Thomas, D., 1995. "Like Father, Like Son, Like Mother, Like Daughter, Parental Resources and Child Height," Papers 95-01, RAND - Reprint Series.
- Rabin, Matthew & Weizsäcker, Georg, 2007.
"Narrow Bracketing and Dominated Choices,"
IZA Discussion Papers
3040, Institute for the Study of Labor (IZA).
- Pnina O. Plaut & Steven E. Plaut, 2004. "The Economics of Housing Savings Plans," The Journal of Real Estate Finance and Economics, Springer, vol. 28(4), pages 319-337, 05.
- Scholten, Ulrich, 2000. "Rotating Savings and Credit Associations in Developed Countries: The German-Austrian Bausparkassen," Journal of Comparative Economics, Elsevier, vol. 28(2), pages 340-363, June.
- Schady, Norbert & Rosero, José, 2008.
"Are cash transfers made to women spent like other sources of income?,"
Elsevier, vol. 101(3), pages 246-248, December.
- Schady, Norbert & Rosero, Jose, 2007. "Are cash transfers made to women spent like other sources of income?," Policy Research Working Paper Series 4282, The World Bank.
- Borsch-Supan, Axel & Stahl, Konrad, 1991. "Do savings programs dedicated to home-ownership increase personal savings? : An analysis of the West German Bausparkassen system," Journal of Public Economics, Elsevier, vol. 44(3), pages 265-297, April.
- Esther Duflo, 2000.
"Grandmothers and Granddaughters: Old Age Pension and Intra-household Allocation in South Africa,"
NBER Working Papers
8061, National Bureau of Economic Research, Inc.
- Esther Duflo, 2003. "Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South Africa," World Bank Economic Review, World Bank Group, vol. 17(1), pages 1-25, June.
When requesting a correction, please mention this item's handle: RePEc:ces:ifowps:_163. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra)
If references are entirely missing, you can add them using this form.