Bequests as a heir "disciple device."

This paper develops a model ofinter vivos gifts and bequests in a setting of moral hazard and adverse selection. Altruistic parents do not perfectly know how much effort their children make to earn their living, nor do they know their true level of ability.Inter vivos gifts take place prior to the realization of the children's earnings whereas at the moment of bequests, parents do observe them. We show that an optimal transfer policy generally uses a mix ofinter vivos gifts — deemed as more efficient — and bequests — deemed as more redistributive.We are thankful to Allessandro Cigno, Jacques Cremer, Claude d Aspremont and anonymous referees for their comments.Responsible editor: Alessandro Cigno     

Happiness functions with preference interdependence and heterogeneity: the case of altruism within the family

This study investigates the prevalence and extent of altruism by examining the relationship between parents’ and their adult children’s subjective well-being in a data set extracted from the German Socio-Economic Panel. To segregate the share of parents with altruistic preferences from those who are selfish, we estimate a finite mixture regression model. We control for various sources of potential bias by taking advantage of the data’s panel structure. To validate our modeling approach, we show that predicted altruists indeed make higher average transfer payments.      

Population policy and individual choice

The general equilibrium implications of endogenous fertility for several social issues of population policy are examined. Laissez faire is found to lead to Pareto optimality within generations even in the presence of public goods and Malthusian diminishing returns. On the other hand, bequests emerge as a major potential source of Pareto inefficiency when parents care about the number and welfare of their offspring. Also considered are questions of intergenerational justice and equity using an intergenerational social welfare function. It is shown that maximizing the sum of utilities always leads to a larger population than maximizing per capita utility, but that the laissez-faire solution may lie outside the interval bounded by the two criteria.Invited Lecture at the First Annual Conference of the European Society for Population Economics, Rotterdam, 18–19 September 1987In preparing this paper, I have drawn heavily on joint work with Assaf Razin and Efraim Sadka, both of Tel-Aviv University, and on our book, Household and economy: Welfare economics of endogeneous fertility (Academic Press, New York 1987). I am indebted to two anonymous referees for helpful comments     

The effects of gender control on fertility and children's consumption

Effects of sex preference on investments in children‘s human capital, bequests and fertility are studied, with and without sex selection, in a model based on parental altruism. Both pure sex preference, a feature of the parental utility function, and indirect preference, which arises from gender-related differences in earnings opportunities, are examined. When there is no gender control the impact of pure sex preference is seen in smaller consumption for daughters than for sons. However, when gender control is exerted, sex preference raises the sex ratio and it is possible that sisters may, on average, consume no less than their more numerous brothers. In an example of the model with specific functional forms, parents who practise gender control have larger families than if sex selection techniques were unavailable. The effect is magnified if sons‘ earnings opportunities are better than daughters‘. JEL classification: D11, J13, J16 Received August 31, 1995 / Accepted May 2, 1996     

Mobility, information, and bequest: The “other side” of the equal division puzzle

There is substantial evidence that parental bequests to children are typically equal in the US—a regularity inconsistent with the predictions of standard bequest models. The prior explanation for this puzzle is parents’ desire to signal equal affection given children’s incomplete information of parental preferences. However, parents also have incomplete information regarding children preferences—which has not been considered. Using a strategic bequest framework, we show that when parents have sufficient uncertainty regarding children’s relocation returns, a separating equilibrium where parents reward attentive heirs with larger bequests is precluded. Such uncertainty appears consistent with conditions in the contemporary USA.     

On the surge of altruism

To date, many arguments to explain altruistic behavior were based on `kin selection'. This note shows that evolution can sustain altruism even if the players are not necessarily genetically linked. Depending on the payoff parameters in a prisoner's dilemma game, there can be four distinct types of equilibria, for each of them the proportion of altruists in the population is described. The author is grateful to an anonymous referee for valuable comments. Responsible editor: Alessandro Cigno.     

Parents’ economic support of young-adult children: do socioeconomic circumstances matter?

We assess how the support parents provide to young adults as they leave school and begin working is related to their family’s socioeconomic circumstances. We do this using an innovative Australian data set which merges survey and administrative data. The survey data inform us about intergenerational co-residence and financial gifts and the administrative data about the family’s welfare receipt history. We find that disadvantaged young people are more likely to be economically independent of their parents than are their more advantaged peers. This disparity is larger for financial gifts than for co-residence and increases with age. Moreover, there is a complex relationship between parental support and participation in study and work. We find no evidence, however, that a lack of parental support is the source of the socioeconomic gradient in either studying or employment. These results are important in eliminating one potential pathway through which socioeconomic disadvantage limits young people’s outcomes.     

Bequest division and population growth: A lineal extinction probability approach

This study uses a lineal-extinction-probability-minimization approach proposed by Chu (1991) to study the relation between bequest division and population growth. Using a Markov branching process and “first-degree stochastic dominance” technique, our model's results imply that any specific bequest division, primogeniture or equal divisions, does not necessarily increase or reduce the population growth by itself. Whether the population does grow, or by how much, will be determined by the concurrent social-economic conditions. We find that if all family heads faced an increasing MRTS technology and/or a relatively unfair market chance, then they would tend to choose an unequal division as their optimal bequest policy, and population growth would increase. However, if an equal division was adopted involuntarily by family heads or was enforced by laws, then the population growth might decline. Received: 26 November 1999/Accepted: 26 October 2000     

Labor immigration and long-run welfare in a growth model with heterogenous agents and endogenous labor supply

This paper examines the consequences of labor immigration in an OLG economy in which agents have an elastic labor supply and differ with respect to degrees of altruism and rates of time preference. It focuses on three substantive questions. First, how do immigrants influence the bequest motive of altruistic natives? Second, what impact do immigrants have on the labor supply of natives? Finally, how does immigration affect the long-run welfare of both altruistic and non altruistic natives? Received: 25 November 1999/Accepted: 07 April 2000     

Endogenous fertility in a model with non-dynastic parental altruism

A model of fertility choice is studied in which the utility of parents depends on how much they consume, on how many children they have and on the consumption of their children. Hence, parents are altruistic towards their children, but in a more limited sense than in the much discussed dynastic fertility model presented by Becker and Barro (1988). The concept of a (subgame perfect) bequest equilibrium is used to solve the non-dynastic model considered here. The steady state birth rate is lower in the non-dynastic model than in the Becker-Barro model. However, the key qualitative predictions concerning the dynamic behavior of fertility are strikingly similar in both models. JEL classification: J13, J11, D90. Received August 17, 1995/Accepted October 20, 1996     

Striving for Prestige in Samoa: A Comparison of Men,Women, and Fa’afafine

ABSTRACT

In numerous non-Western cultures around the world, a small but meaningful proportion of individuals occupy alternative gender categories beyond the man/woman binary. A substantial body of past research has shown that feminine, same-sex attracted males in Samoa—a nonbinary gender known as fa’afafine—are more altruistic toward their nieces and nephews than are Samoan men and women. The present study examined the degree to which these kin-directed altruistic tendencies of fa’afafine are motivated by striving for prestige, and hence demonstrating value, within their family. Results showed that cisgender men and women do not differ in the degree to which they seek familial recognition of their altruistic behavior toward nieces and nephews. However, compared to men, fa’afafine sought significantly more acknowledgment of this altruism. These results illustrate one proximate cognitive mechanism for the elevated kin-directed altruism of fa’afafine and highlight the importance of the sociocultural context in which these motivations develop.     

Strategic altruistic transfers and rent seeking within the family

This paper examines the rent-seeking behavior of “selfish” children in competing for parental transfers. The paper extends Chang and Weisman (South Econ J 71:821–836, 2005), that focuses on compensated transfers, to allow for non-compensated transfers à la Buchanan (J Law Econ 26:71–85, 1983) and derives results for the case in which children’s time contributions as perceived by their parents are a merit good (e.g., service), pure waste (e.g., bugging), or a mix of both. For an increase in the proportion of time contributions that are pure waste, parents find it optimal to reduce the size of an overall transfer, thereby lowering the levels of wasteful rent-seeking activities by their children within the family.

Extremism within the family

This paper considers an economic analysis of intergenerational transition of ethnic and social trait. We consider the level of social traits chosen by parents and its effect on their children’s choice of ethnic and social traits when reaching adulthood. We develop a theory that suggests that parents will chose extreme ethnic and social traits to increase the cost that their children will pay if they wish to deviate from their parents’ “ideal.” The extreme choice of the ethnic social traits of parents has an effect on the segregation of minorities and migrants.

Durable consumption,saving and retirement

Durables yield services through life but are also a store of value and both features may have important implications for savings and retirement decisions. Durables also affect bequests and thus induce intergenerational transfers. We show that allowing explicitly for durables has important implications for retirement decisions and responses to various changes in the environment. An improvement in the possibility of freeing housing capital makes the old retire earlier (income effect) while the young plan to retire later since they increase housing demand and reduce financial savings. Considering welfare in stationary equilibrium, we find that a reduction in wealth locking-in in durables is not necessarily welfare improving due to the effects on bequests. From a social welfare perspective, individuals tend to choose too much financial savings, too little durable acquisition and too early retirement.     

The Values Adolescents Aspire to,Their Well-being and the Values Parents Aspire to for Their Children

This paper presents a study of the relationship between the psychological well-being of Spanish adolescents from 12 to 16 years old and the values they aspire to for the future (N = 1,618). Adolescents’ well-being is explored through (a) their satisfaction with 19 specific life domains, (b) the Personal Well-Being Index (Cummins, Social Indicators Research, 43, 307−334, 1998) and (c) an item on overall satisfaction with life. The values they aspire to are explored by means of a list of 23 personal qualities or values. Satisfaction domains and values aspired to have been grouped into dimensions using principal component analysis (PCA). Boys scored significantly higher on the materialistic values dimension and the capacities and knowledge related values dimension, while girls scored higher on the interpersonal relationship related values dimension. The youngest adolescents scored higher on materialistic values, while the oldest scored higher on interpersonal relationships related values. Such results are similar to those obtained in a previous study, using a shorter version of the lists of satisfaction domains and of values aspired to and a sample of 8,995 adolescents and 4,381 of their parents from five different countries. In both studies results suggest that values aspired to can be considered a well-being related construct. However, an important change appears in the latest Spanish sample: Family values no longer fit with the interpersonal relationships related values dimension in the PCA, and now function as a separate value dimension which shows no correlation with overall life satisfaction, the PWI, or life satisfaction domains with the exception of family satisfaction. Interestingly, family values have also changed their loading dimension in the PCA developed with the answers from a sample of parents about the values they aspire to for their own child’s future (N = 723). Parents’ responses were compared with those of their own child, with concordances observed in about half of the families, low discrepancies in about one third and high or very high discrepancies in about 20%. Although the results of this study have their limitations, they suggest support for the hypothesis that important changes in values aspired to may be taking place over a short period of time, consistent with the findings of changes in values in several countries (Inglehart, Modernization and postmodernization. Cultural, economic and political change in 43 societies, Princeton: Princeton University Press, 1997), but apparently with no outstanding impact on adolescents’ well-being.     

Sibling size and investment in children’s education: an asian instrument

This study estimates the trade-off between child quantity and quality by exploiting exogenous variation in fertility under son preferences. Under son preferences, both sibling size and fertility timing are determined depending on the first child’s gender, which is random as long as parents do not abort girls at their first childbearing. For the sample South Korean households, I find strong evidence of unobserved heterogeneity in preferences for child quantity and quality across households. The trade-off is not as strong as observed cross-sectional relationships would suggest. However, even after controlling for unobserved heterogeneity, a greater number of siblings have adverse effects on per-child investment in education, in particular, when fertility is high.

Children’s Resilience-Related Beliefs as a Predictor of Positive Child Development in the Face of Adversities: Implications for Interventions to Enhance Children’s Quality of Life

This paper reports the findings of a longitudinal childhood resilience study which investigated the relationship between resilience-related beliefs and positive child development. Three waves of data collection (T1, T2, and T3) were completed in January 2005, July 2005, and January 2006 with a sample of 843 grade 4 pupils, drawn from six primary schools in Hong Kong, and their parents or guardians. At T1, parents/guardians responded to a 24-item inventory of life adversities affecting their children since birth; at T1 and T3, they completed a 25-item Parental Assessment of Child’s Habit, which provided parental evaluation of children’s performance at home and in school. At T1, T2, and T3, children responded to a 58-item Child and Youth Resilience Measure, a 9-item scale on Chinese cultural beliefs about adversity, and an 11-item Chinese Resilience Measure for Children and Adolescents in Hong Kong. Regression analyses, based on linear mixed models, controlling for gender, T1 and T2 scores, personal variables, and random effects of schools, were conducted to test and validate the hypothesis that children’s resilience beliefs are predictive of positive child development, and that this predictive relationship is stronger with increasing adversity in children’s lives. Implications of these findings for the development of resilience-based interventions to enhance the quality of life of children facing adversities are examined.     

私人转移支付与农村反贫困

文章利用中国农户的微观数据,分析了私人转移支付的决定因素及福利影响。处理效应模型、双变量Probit模型和回归分解的结果显示,私人转移支付具有利他动机,弱势农户更易获得私人转移支付;私人转移支付对接受者的支出、贫困没有影响,而对储蓄有显著正向影响;私人转移支付在缩小接受者和非接受者的福利不平等方面作用微弱。     

Individual and institutional determinants of multidimensional poverty: A European comparison

In this article we evaluate to what extent between-country differences in the probability of being ‘multidimensional’ poor can be explained by a range of ‘domain-specific’ indicators of welfare regime arrangements. To this end, a so-called micro-macro model is estimated, testing the ‘independent’ effect of institutions, as opposed to alternative explanations such as between-country differences in population composition and economic affluence. Although we conclude that institutional arrangements do influence the risk of multidimensional poverty in the expected direction, we also find that bringing the ‘economy’ back into the analyses has a non-trivial impact. Our results point at several avenues for further discussion and research. First, although the more elaborate welfare regimes generally do a better job in preventing poverty, the level of transfers is not always ‘proportional’ to the general standard of living in these countries. Second, we only find partial confirmation for the often cited ‘negative’ impact of labour market flexibility and the related equality-jobs trade-off. While stricter employment regulations do reduce the poverty risk (be it only after controlling for economic affluence), flexibility in terms of the availability of fixed-term labour seems to be preferable to unemployment, even if at the individual level, labour market flexibility increases the likelihood of being poor quite severely.

Hidden information problems in the design of family allowances

We consider the optimal determination of family allowances in a model where some of the parents have higher ability to raise children than others. First-best policy gives both types of parents the same level of utility. If neither parental ability nor parental actions are fully observable, however, the policy maker has to take into account the incentive-compatibility constraint that more able parents should not find it profitable to mis-represent their true ability by investing less in their children, and having a lower number of children. The second-best policy induces more able parents to have the first-best number of children, and to invest in each child at the first-best level. Less able parents are induced to have fewer children than in first best, and will underinvest in each child. Whether the government should subsidize more the more able parents, or the less able ones, depends on the properties of the cost function. In second best, however, less able parents will end up with lower utility than more able parents whatever the cost function.All correspondence to Annalisa Luporini. The paper has benefitted from comments by three anonymous referees. Responsible editor: Junsen Zhang.