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Raising Juveniles

Author

Listed:
  • Bell, Clive

    (Heidelberg University)

  • Gersbach, Hans

    (ETH Zurich)

  • Schneider, Maik T.

    (University of Bath)

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.

Suggested Citation

  • Bell, Clive & Gersbach, Hans & Schneider, Maik T., 2010. "Raising Juveniles," IZA Discussion Papers 5036, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp5036
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    References listed on IDEAS

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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.
    2. 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.

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    More about this item

    Keywords

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    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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