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Games Parents and Adolescents Play: Risky Behaviors, Parental Reputation, and Strategic Transfers

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  • Lingxin Hao
  • V. Joseph Hotz
  • Ginger Z. Jin

Abstract

This paper examines reputation formation in intra-familial interactions. We consider parental reputation in a repeated two-stage game in which adolescents decide whether to give a teen birth or drop out of high school, and given adolescent decisions, the parent decides whether to house and support his children beyond age 18. Drawing on the work of Milgrom and Roberts (1982) and Kreps and Wilson (1982), we show that the parent has, under certain conditions, the incentive to penalize older children for their teenage risky behaviors in order to dissuade the younger children from the same risky behaviors. The model generates two empirical implications: the likelihood of teen risky behaviors and parental transfers to a child who engaged in teen risky behaviors will decrease with the number of remaining children at risk. We test these two implications, using data from the National Longitudinal Survey of Youth, 1979 Cohort (NLSY79). Exploiting the availability of repeated observations on individual respondents and of observations on multiple siblings, we find evidence in favor of both predictions.

Suggested Citation

  • Lingxin Hao & V. Joseph Hotz & Ginger Z. Jin, 2005. "Games Parents and Adolescents Play: Risky Behaviors, Parental Reputation, and Strategic Transfers," NBER Working Papers 11872, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:11872
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    Cited by:

    1. Deborah Cobb-Clark & Tue Gørgens, 2014. "Parents’ economic support of young-adult children: do socioeconomic circumstances matter?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 447-471, April.
    2. Nicoletti, Cheti & Rabe, Birgitta, 2014. "Sibling spillover effects in school achievement," ISER Working Paper Series 2014-40, Institute for Social and Economic Research.
    3. Price, Joseph & Swigert, Jeffrey, 2012. "Within-family variation in obesity," Economics & Human Biology, Elsevier, vol. 10(4), pages 333-339.
    4. Anyck Dauphin & Abdel‐Rahmen El Lahga & Bernard Fortin & Guy Lacroix, 2011. "Are Children Decision‐Makers within the Household?," Economic Journal, Royal Economic Society, vol. 121(553), pages 871-903, June.
    5. Black, Sandra E. & Devereux, Paul J. & Salvanes, Kjell G., 2016. "Healthy(?), wealthy, and wise: Birth order and adult health," Economics & Human Biology, Elsevier, vol. 23(C), pages 27-45.
    6. V. Hotz & Juan Pantano, 2015. "Strategic parenting, birth order, and school performance," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(4), pages 911-936, October.
    7. Kohei Kubota & Akiko Kamesaka & Masao Ogaki & Fumio Ohtake, 2013. "Cultures, Worldviews, and Intergenerational Altruism," ERSA conference papers ersa13p758, European Regional Science Association.
    8. Deborah Cobb-Clark & David Ribar, 2012. "Financial stress, family relationships, and Australian youths’ transitions from home and school," Review of Economics of the Household, Springer, vol. 10(4), pages 469-490, December.
    9. Marco Cosconati, 2011. "Parenting Style and the Development of Human Capital in Children," 2011 Meeting Papers 854, Society for Economic Dynamics.
    10. Matthias Doepke & Fabrizio Zilibotti, 2017. "Parenting With Style: Altruism and Paternalism in Intergenerational Preference Transmission," Econometrica, Econometric Society, vol. 85, pages 1331-1371, September.
    11. Peter Leopold S. Bergman, 2016. "Technology Adoption in Education: Usage, Spillovers and Student Achievement," CESifo Working Paper Series 6101, CESifo Group Munich.
    12. Cobb-Clark, Deborah A. & Salamanca, Nicolas & Zhu, Anna, 2016. "Parenting Style as an Investment in Human Development," IZA Discussion Papers 9686, Institute for the Study of Labor (IZA).
    13. Deborah A. Cobb-Clark & David C. Ribar, 2009. "Financial Stress, Family Conflict, and Youths’ Successful Transition to Adult Roles," CEPR Discussion Papers 627, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    14. Peter Leopold S. Bergman, 2015. "Parent-Child Information Frictions and Human Capital Investment: Evidence from a Field Experiment," CESifo Working Paper Series 5391, CESifo Group Munich.
    15. Vipul Bhatt & Masao Ogaki, 2012. "Tough Love And Intergenerational Altruism," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(3), pages 791-814, August.
    16. Sebastian Galiani & Matthew Staiger & Gustavo Torrens, 2017. "When Children Rule: Parenting in Modern Families," NBER Working Papers 23087, National Bureau of Economic Research, Inc.
    17. repec:iae:iaewps:wp2016n3 is not listed on IDEAS

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    • J1 - Labor and Demographic Economics - - Demographic Economics

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