the effect of income on child development this study presents estimates of the effect of parental income on children s cognitive social and emotional development the effect of current income is small especially when income is treated as endogenous the effect of permanent income is substantially larger but relatively small when compared to the magnitude of recent policy induced changes in income family background characteristics play a more important role than income in determining child outcomes policies that affect family income will have little direct impact on child development unless they result in very large and permanent changes in income

democratic states and international disputes a growing literature in international relations concludes that democratic states pursue distinctive foreign policies specifically democracies do not engage each other in war and only rarely engage each other in serious disputes short of war scholars have offered three basic explanations to support these findings each of the three invokes a different explanatory variable norms checks and balances and trade none of the three however provides a convincing explanation of the peace that is said to prevail between democratic polities the distinction between norms and interests is unclear substitutes for checks and balances exists in nondemocracies and trade can deter conflict only under restrictive conditions

stature and the standard of living research on the standard of living now emphasizes alternatives or supplements to the national income accounts this paper reviews the results of two decades of research using stature as a measure of health aspects of human welfare after comparing and contrasting stature with per capita income i consider height patterns discovered by economic historians that challenge traditional beliefs about the past including long term trends cycles in heights and the dreadfully small stature of slave children that was followed by catch up growth the paper concludes with comparisons to work in development economics and suggestions for research

data watch the american time use survey we discuss the new american time use survey atus an on going household survey of roughly 1 200 americans per month 1 800 per month in the first year 2003 that collects time diaries as well as demographic interview information from respondents who had recently been in the current population survey the characteristics of the data are presented as are caveats and concerns that one might have about them a number of novel uses of the atus in economic research including in the areas of macroeconomics national income accounting labor economics and others are proposed to illustrate the magnitude of this new survey s possible applications

extended families and child well being studies of household behavior have established the distribution of resources among household members predicts spending and savings patterns however there is a paucity of evidence on the relationship between the well being of individual family members and the distribution of resources within an extended family including non co resident family members given the central role the family plays in many models of economic behavior this is an important gap in the literature using rich longitudinal survey data from the indonesia family life survey ifls evidence is presented on the relationship between three measures of health and education related human capital of children and the distribution of resources among extended family members ifls is ideally suited for this research since the survey collects detailed information about income and wealth from both coresident and non co resident family members the empirical model is founded on a natural extension of the collective model of household decision making chiappori 1988 1992 to the extended family the model is particularly appealing in this context because it places few restrictions on preferences of individual family members and does not specify a specific bargaining mechanism that underlies negotiations the collective model yields empirical tests of whether the behavior of family members is pareto efficient a special case of the model allows all family members to be completely altruistic which is observationally equivalent to a unitary model of family behavior that special case is rejected by the data however the restrictions of the efficient model are not rejected indicating that non co resident family members are able to co ordinate allocation decisions with respect to child human capital investments in such a way as to make no family member better off without another member being worse off

domestic distortions and international trade in this paper we develop techniques for measuring the trade policy equivalent of domestic distortions using a distance function approach our measure the trade restrictiveness index is shown to equal the uniform tariff which is welfare equivalent to a given pattern of domestic taxes and subsidies we extend the index to incorporate taxes in markets for nontraded goods and factors of production and illustrate its operationality with an application to liberalisation in mexican agriculture we conclude that our index has considerable potential in empirical work and as an aid to trade negotiators it is widely appreciated that government policies of a purely domestic nature can have major implications for a country s international trade to give just one example such implications were widely discussed in the context of the recent gatt round in which u s negotiators insisted that intra ec agricultural policy should be viewed as trade distorting however analysts and negotiators have not hitherto had access to a conceptual framework which would allow the trade effects of domestic policies to be measured in a consistent way in this paper we propose such a framework and show how it may be implemented empirically of course other attempts have been made to quantify the overall distortionary effects of domestic policies these have involved constructing empirically based indexes such as producer or consumer subsidy equivalents 2 however such measures have no theoretical foundation moreover since they use the shares of different sectors in production or consumption as weights they are likely to be systematically biased for example sectors whose output levels are reduced by high taxation are assigned low weights whereas their true weights should be higher by contrast we show below that our approach is based firmly on welfare economics and correctly uses marginal rather than average production and consumption shares as weights the approach we propose draws on recent work by two of the authors anderson and neary 1990 1992b which dealt with trade distortions only that work developed a scalar index the trade restrictiveness index or tri which equals the equiproportionate rate of trade restriction which is equivalent in welfare terms to

a cournot nash model of family decision making this paper models a two person family each family member is utility maximising yet family members are interdependent because of caring and public goods within the family the two family members interdependent utility maximisation problems are first solved using a non cooperative or cournot nash game theoretic framework the cournot nash equilibrium is then used as a threat point in a bargaining game the paper provides a rigorous derivation of the properties of household demands a full analysis of the determinants of intra household resource allocation including the effect of varying household bargaining power and consideration of policy implications

input tariffs duty drawbacks and tariff reforms abstract this paper provides a systematic analysis of the effects of input tariffs and duty drawbacks on welfare the paper arrives at two broad conclusions first tariffs on inputs unaccompanied by duty drawbacks on exports have an ambiguous effect on welfare second increases in tariffs on inputs complemented by full duty drawbacks are welfare improving up to a point provided goods exhibit substitutability in production as well as consumption the latter conclusion is reinforced by the presence of a revenue constraint

group decision making with uncertain outcomes unpacking child parent choice of the high school track predicting group decisions under uncertainty requires disentangling individual members utilities over the consequences of choice their expectations for uncertain outcomes and their choice process as a group i estimate simple bayesian models of child parent choice of high school track with subjective risk and unilateral or bilateral nonstrategic decisions by combining families actual choices with novel survey information about children s and parents subjective probabilities over choice consequences their individually preferred choices and their decision roles a set of policy counterfactuals confirms the importance of introducing the beliefs and decision roles of individual members in models and policy analysis of group decisions

tariff reform in the presence of sector specific distortions the problem of choosing second best trade policies is modified by including sector policies as well as tariffs formulae for the optimal tariff and sector specific subsidy are derived and used to study the design of optimal policy menus the theory is applied to a computable general equilibrium model of the u s economy which emphasizes agriculture the model suggests that non agricultural distortions do not provide a second best argument for substantial levels of agricultural protection reforme tarifaire quand il existe des distorsions specifiques a un secteur le probleme du choix de politiques commerciales de second ordre est modifie quand on inclut des politiques specifiques a un secteur tout autant que les tarifs douaniers les auteurs derivent les formules pour le tarif optimal et pour la subvention sectorielle optimale et les utilisent dans l etude de la construction des menus de politiques optimales ils appliquent la theorie a un modele calculable d equilibre general de l economie des etats unis qui met l accent sur le secteur agricole le modele suggere que des distorsions dans les secteurs non agricoles ne fournissent pas un argument de second ordre qui supporterait des niveaux de protection substantiels pour le secteur agricole

welfare effects of aid under quantitative trade restrictions the paper examines the effects of tied aid on the welfare of both the donor and the recipient countries we depart from the previous literature by assuming preexistence of quantitative trade distortions to mitigate these distortions the donor country provides aid that is tied to the rationed good conditions for the presence of the transfer paradox and of the enrichment of both countries are derived and interpreted under the stability of the system furthermore we show that whereas untied aid cannot increase global welfare tied aid unambiguously does so

comment on j p neary pitfalls in the theory of international trade policy concertina reforms of tariffs and subsidies to high technology industries peter neary makes three points in his discussion of subsidies to hightechnology industries first the standard brander spencer one period duopoly model does not provide an argument for subsidies to high technology industries there is nothing in the model that identifies the firms as high tech if anything the fixed and small number of firms is a description of any industry with high barriers to entry low tech as well as high tech second the brander spencer three period duopoly model does capture an important feature of high technology industries namely substantial initial investment in r d in the model the government decides first about taxes or subsidies to the domestic firm s r d and output or price the firm invests in r d in the first actually second period which has a strategic effect on its rival both in the first and second period when production takes place but it turns out that the three period model is plagued by the same kind of ambiguity as the one period model only doubly so when second period actions are strategic substitutes the firm overinvests in the first period to give it a strategic advantage in the second period the welfare maximizing policy is to subsidize output in the second period and tax r d in the first when second period actions are strategic complements policies should be the opposite third when r d has positive spillovers to other firms domestic and foreign a subsidy is called for to prevent underinvestment by the domestic firms thus there may be reasons to tax and to subsidize r d at the same time which makes for even more ambiguity i would like to add to the ambiguity concerning subsidies to hightechnology industries by investigating the effects of subsidies under other assumptions about market structure and conduct nothing in what i have to say is new but a serious consideration of the potential for public policy must be broader in scope than the market structure of two firms no domestic consumption and strategic interaction consider first the case of perfect competition a subsidy to exports is

intra household resource allocation an inferential approach if household income is pooled and then allocated to maximize welfare then income under the control of mothers and fathers should have the same impact on demand with survey data on family health and nutrition in brazil the equality of parental income effects is rejected unearned income in the hands of a mother has a bigger effect on her family s health than income under the control of a father for child survival probabilities the effect is almost twenty times bigger the common preference or neoclassical model of the household is rejected if unearned income is measured with error and income is pooled then the ratio of maternal to paternal income effects should be the same equality of the ratios cannot be rejected there is also evidence for gender preference mothers prefer to devote resources to improving the nutritional status of their daughters fathers to sons

divided government and u s trade policy theory and evidence if different parties control the u s congress and white house the united states may maintain higher import protection than otherwise this proposition follows from a distributive politics model in which congress can choose to delegate trade policymaking to the president when the congressional majority party faces a president of the other party the former has an incentive to delegate to but to constrain the president by requiring congressional approval of trade proposals by up or down vote this constraint forces the president to provide higher protection in order to assemble a congressional majority evidence confirms that 1 the institutional constraints placed on the president s trade policymaking authority are strengthened in times of divided government and loosened under unified government and 2 u s trade policy was significantly more protectionist under divided than under unified government during the period 1949 90

testing the neoclassical model of family labor supply and fertility the mcelroy horney nash bargaining model of family demand behavior relaxes the restriction that nonearned income of husband and wife has the identical effect on family labor supply and commodity demands this restriction of the neoclassical model offamily behavior is tested for the determination of husband and wife labor supply andfertility based on the 1981 socioeconomic survey of thailand the neoclassical restriction is rejected for female labor supply andfertility another unexplored limitation offamily demand studies due to the sample self selection of intact marriages is empirically treated through alternative estimation strategies in this case a more sharply focused theory of marital behavior is needed to identify family demand models

the empirical content of nash bargained household behavior in households whose allocation decisions can be represented as nash bargained household decisions extrahousehold environmental parameters eeps serve as pure shifters of the threat points the comparative statics of changes in demands due to changes in these eeps are given these are incorporated into a comprehensive statement of the empirical content of nash bargained household behavior including a nash generalization of barten s 1966 fundamental matrix equation of the theory of consumer demand estimation and data requirements are discussed along with nested testing of the following structure the neoclassical model is nested in the nash bargained model which in turn is nested in an unrestricted model of household demands emphasized throughout is the enriched menu of explanatory variables for demand analysis provided by the nash model as well as the model s ability to jointly analyze i household formation and ii intrahousehold allocation decisions

child control in education decisions an evaluation of targeted incentives to learn in india i report the results of a field experiment in gurgaon india that offered cash and noncash incentives to learn either to children or to their parents while i find no evidence that the identity of the recipient or form of the reward mattered in the aggregate noncash incentives targeted to children were more effective for initially low performing children while cash incentives were more effective for high performing children to explore the mechanisms behind this result i present a model of household education production and find additional empirical results consistent with the model

recent developments in multilateral policy reform theoretical work on the reform of tariffs and quantity restrictions on trade has been focused on deriving recommendations for pareto improving changes in policy as in the optimal closed economy tax reform literature e g diewert 1978 there has been an emphasis on coming up with simple answers to practical policy questions which way is up and checkable evaluation criteria for policy reform proposals the literature on tariff and quota reform can be divided into two subsets the first deals with policy reform in a single usually small country unilateral policy reform and the second considers reforms in a many country world multilateral policy reform on unilateral policy reform concerning tariffs we refer the reader to foster and sonnenschein 1970 bertrand and vanek 1971 hatta 1977 smith 1980 diewert turunenred and woodland 1989 1991 and vousden 1990 ch 9 and concerning quotas to falvey 1988 anderson and neary 1992 neary 1995 and vousden 1990 ch 9 two broad policy conclusions emerge from this literature under various assumptions proportional reductions of all tariffs and reductions of extreme ad valorem tariffs can be welfare improving also for unilateral changes relaxations of binding quotas with no tariffs and relaxations of quotas with extreme quota premia when tariffs are present and goods are net substitutes can produce welfare gains the second and smaller subset of the international trade literature deals with multilateral changes early contributions extend the broad policy conclusions of the unilateral literature to a many country world but suffer from stringent assumptions such as requirements that all commodities should be net substitutes or that all goods should be normal turunen red and woodland 1991 offer a generalization of the unilateral rule for proportional tariff reforms i e that in each country tariffs should be altered proportionally to a vector of suitably defined shadow prices and

gaining ground poverty in the postwar united states official measures of poverty in the united states are compiled by the bureau of the census by comparing a household s income level to a prespecified threshold from a theoretical perspective it is more appropriate to evaluate the level of poverty using a consumption based measure of household welfare in this paper i evaluate the level of poverty using expenditure data from the consumer expenditure survey i find that consumption based poverty rates are much lower than those based on income the trend in the poverty rate in the united states is sensitive to the price index and equivalence scales used to adjust the poverty thresholds

income and outcomes a structural model of intrahousehold allocation there is evidence from several sources that one cannot treat many person households as a single decision maker if this is the case then factors such as the relative incomes of the household members may affect the final allocation decisions made by the household we develop a method of identifying how incomes affect outcomes given conventional family expenditure data the basic assumption we make is that household decision processes lead to efficient outcomes we apply our method to a sample of canadian couples with no children we find that the final allocations of expenditures on each partner depend significantly on their relative incomes and ages and on the level of lifetime wealth

eliciting time versus money time scarcity underlies asymmetric wage rates marketing strategies are often tied to how consumers spend time e g waiting in lines searching across stores in return for money e g receiving a discount viewing such time money tradeoffs in terms of a reservation wage rate for consumers we identify a wage rate asymmetry between two elicitation procedures a money elicit mel state the minimum amount of money m that you would accept in return for spending a given number of hours t and b time elicit tel state the maximum number of hours t that you would spend in return for accepting a given amount of money m while these procedures are normatively equivalent we propose that tel vs mel wage rates are higher because time scarcity receives a higher weight in tel judgments in eight studies including both hypothetical and real settings we document the wage rate asymmetry the time scarcity process and a downstream consequence of tel vs mel reducing the likelihood of accepting a time money tradeoff we discuss the implications for practice and for research on wage rates time versus money procedural invariance and scarcity

inequality in the joint distribution of consumption and time use abstract this paper examines inequality in both leisure and consumption over the past four decades using time use surveys stretching from 1975 to 2016 we estimate the distribution of leisure time conditional on hours worked and other individual level and family level characteristics we show that these characteristics especially when including work hours explain most of the long run variation in leisure we then use these estimates to predict the distribution of leisure using work hours and other characteristics in the consumer expenditure survey a survey that also provides detailed information on consumption the advantage of this approach is that it gives us measures of consumption and leisure at the family level within a single data source combining consumption and leisure allows us to characterize more accurately changes in the distribution of well being we find that leisure time is highest for families at the bottom of the consumption distribution and typically declines monotonically as consumption rises however the consumption leisure gradient is small we find noticeable differences across family types with the gradient being largest for single parent families and single individuals and smallest for families with a head age 65 or older the negative relationship between consumption and leisure appears strongest during the period around the great recession we find that including both leisure and consumption as opposed to just consumption in a measure of economic well being results in less inequality the negative association between leisure and consumption is a sufficient condition for this result however the degree to which leisure inequality offsets consumption inequality depends on the valuation of leisure

trends in time allocation a cross country analysis abstract using detailed time use data for seven industrialized countries from the 1970s until today we document general decreases in men s market work coupled with increases in men s unpaid work and child care and increases in women s paid work and child care coupled with decreases in unpaid work we also find almost universal increases in the time devoted to watching television over this period and uncover a widespread increase in leisure inequality in favor of lower educated adults trends in leisure inequality mirror the general increase in income and earnings inequality experienced in most countries over this period especially after the mid 1980s all these findings are consistent with previous results for the us however in contrast to the increases in leisure found for the us we fail to find common trends in leisure time across countries over the period analyzed

piecemeal trade reform in presence of producer specific domestic subsidies abstract we extend the theory of unilateral piecemeal tariff reforms by considering both economy wide tariffs and sector specific production subsidies distortions sufficient conditions for welfare improving policy reforms involve both tariffs and sector specific distortions changes and require stronger assumptions on goods substitutability and the structure of distortions

the social meaning of money special monies classic interpretations of the development of the modern world portray money as a key instrument in the rationalization of social life money is reductively defined as the ultimate objectifier homogenizing all qualitative distrinctions into an abstract quantity this paper shows the limits of such a purely utilitarian conception of market money a model of special monies is proposed to examine the extraeconomic social basis of modern money the article argues that while money does indeed transform items values and sentiments into numerical cash equivalents money itself is shaped in the process culture and social structure mark the quality of money by institutionalizing controls restrictions and districtions in the sources uses modes of allocation and even the quantity of money the changing social meaning and structure of domestic money specifically married women s money in the united states 1870 1930 are examined as an empirical case study of a special money

rational household labor supply traditionally household behavior is derived from the maximization of a unique utility function in this paper we propose an alternative approach in which the household is modeled as a two member collectivity taking pareto efficient decisions the consequences of this assumption are analyzed in a three good model in which only total consumption and each member s labor supply are observable if the agents are assumed egoistic i e they are only concerned with their own leisure and consumption it is possible to derive falsifiable conditions upon household labor supplies from both a parametric and nonparametric viewpoint if alternatively agents are altruistic restrictions obtain in the nonparametric context useful interpretation stems from the comparison with the characterization of aggregate demand for a private good economy

the political economy of gender explaining cross national variation in the gender division of labor and the gender voting gap mainstream political economy has tended to treat the family as a unit when examining the distributional consequences of labor market institutions and of public policy in a world with high divorce rates we argue that this simplification is more likely to obscure than to instruct we find that labor market opportunities for women which vary systematically with the position of countries in the international division of labor and with the structure of the welfare state affect women s bargaining power within the family and as a result can explain much of the cross country variation in the gender division of labor as well as the gender gap in political preferences

coordinating climate and trade policies pareto efficiency and the role of border tax adjustments abstract this paper explores the role of trade instruments in globally efficient climate policies focusing on whether or not some form of border tax adjustment bta is warranted when carbon prices differ internationally the analysis shows that while there is no case for bta when all instruments can be freely deployed pareto efficiency does require a form of bta when carbon taxes in some countries are constrained its purpose then is to partly counteract the impact on emissions of inappropriate carbon pricing there or equivalently to undo the trade distortions such pricing creates the required form of bta is generally complex but a special case is identified in which it optimally has the simple structure envisaged in practical policy discussions it is also shown that the efficiency case for bta depends critically on whether climate policies are pursued by carbon taxation or by cap and trade

bargaining and distribution in marriage the standard economic model of the family is a common preference model that assumes that a family maximizes a single utility function and implies that family behavior is independent of which individuals receive income or control resources in recent years this model has been challenged by game theoretic models of marriage that do not impose pooling and are therefore consistent with empirical evidence that income controlled by husbands and wives does have different effects on family behavior in this paper the authors review a number of simple bargaining models and relevant empirical evidence and discuss their implications for distribution within marriage

fixed price controls and ad valorem distortions in an open economy abstract this paper compares the welfare effects of ad valorem and fixed price distortions for an open economy in the case of export protection domestic factor growth is much more likely to be immiserizing when fixed price distortions are used in contrast fixed price protection to an import substitute is less likely to induce immiserization via factor growth than ad valorem protection

marriage specialization and the gender division of labor we consider why the gender division of labor is so often enforced by custom and why customary gender divisions of labor generally involve both direction and prohibition in our formal model agents first learn skills and then enter the marriage market we show that wasteful behavior may emerge due to strategic incentives in specialization choice and human capital acquisition and that both problems may be mitigated through a customary gender division of labor this division is not pareto improving both the distributional effects and welfare gains of a customary gender division of labor decrease as opportunities for market exchange increase

powerful pacifists democratic states and war democracies are less likely to fight wars with each other they are also more likely to prevail in wars with autocratic states i offer an explanation of this syndrome of powerful pacifism drawn from the microeconomic theory of the state state rent seeking creates an imperialist bias in a country s foreign policy this bias is smallest in democracies where the costs to society of controlling the state are relatively low and greatest in autocracies where the costs are higher as a result of this bias autocracies will be more expansionist and in turn war prone in their relations with each other where the absence of this imperialist bias is manifest the relative pacifism of democracies appears in addition democracies constrained by their societies from earning rents will devote greater absolute resources to security enjoy greater societal support for their policies and tend to form overwhelming countercoalitions against expansionist autocracies it follows that democracies will be more likely to win wars

savings of the elderly and desired bequests cross section data often show that the wealth of the elderly increases with age even at advanced ages these and other results suggest that the life cycle hypothesis of consumption should be augmented to include a bequest motive for saving in this paper the author proposes a model of bequests and a test for a bequ est motive using panel data he finds that over a ten year period the elderly in the data set dissaved in contradiction to most cross section results the test offers no support for a bequest motive copyright 1987 by american economic association

multilateral policy reforms and quantity restrictions on trade abstract we specify a many nation many commodity model of international trade involving tariff and quota distortions we derive conditions for the existence of strict pareto improving multilateral reforms of quotas and obtain recommendations for specific directions of such quota reforms given a mild rank condition on the world trade matrix all directions of quota reform that attain a strict pareto improvement using international lump sum compensation remain strict pareto improving even without lump sum compensation provided that the quota reform is accompanied by a multilateral reform of tariffs the precise nature of the tariff reform that accomplishes the redistribution task is determined

pace sequencing and credibility of structural reforms abstract this paper reviews the theory and empirical evidence on the main policy issues relating to the pace credibility and sequencing of structural reforms in less developed countries and post socialist economies it highlights areas where there is broad consensus as well as widespread disagreement among policymakers and economists pointing out along the way areas where more research would be useful

the family inheritance and the intergenerational transmission of inequality unequal inheritance of material wealth is commonly considered a major cause of inequality in consumption however theoretical models of the intergenerational transmission of inequality by becker blinder and ishikawa imply that unequal inheritance may either increase or reduce consumption inequality differences in inherited wealth resulting from unequal parental incomes increase inequality in recipients consumption however unequal bequests caused by differences among families in the endowed ability of children or the costs of producing human capital are equalizing empirical results confirm these predictions the inheritance received by children is inversely related to both children s income and parental education thus bequests are compensatory in that ceteris paribus low income children inherit more than their advantaged contemporaries

the global efficiency of radial tax reductions existing results on the efficiency consequences of a radial reduction in all tax and subsidy distortions in a small competitive open economy are extended by using revealed preference theory to analyze finite changes rather than infinitessimal changes and to allow both for the endogenous determination of which goods are imported which exported and which nontraded and also for the possibility that a finite policy change may cause switches of particular goods among these three categories copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

a review essay on isabel sawhill s generation unbound drifting into sex and parenting without marriage and laurence steinberg s age of opportunity lessons from the new science of adolescence sawhill and steinberg approach risky behavior among youth from two different angles steinberg argues for intervention during the adolescent years to alter behavior in ways that prioritize patience and self regulation while sawhill advocates interventions that mitigate the negative effects of risky behavior both argue that disadvantaged youth suffer worse consequences as a result of risky behavior and therefore stand to gain the most from interventions while the authors develop strong arguments for adolescent interventions the existing evidence on their effectiveness is less compelling to reconcile the promise with the reality i argue that growing up in environments of significant uncertainty reduces the returns to forward thinking behavior in the daily lives of disadvantaged youths interventions to develop adolescent decision making skills so as to reduce risky behavior will not be effective if they are inconsistent with the incentives generated by a local environment that is often characterized by uncertainty

separate spheres bargaining and the marriage market this paper introduces the separate spheres bargaining model a new model of distribution within marriage it differs from divorce threat bargaining models e g manser brown mcelroy horney in that the threat point is not divorce but a noncooperative equilibrium within marriage this noncooperative equilibrium reflects traditional gender roles the predictions of our model thus differ from those of divorce threat bargaining models in the separate spheres model cash transfer payments to the mother and payments to the father can but need not imply different equilibrium distributions in existing marriages in the long run the distributional effects of transfer policies may be substantially altered by changes in the marriage market equilibrium

the great recession and the bulimia of us consumers deep causes and possible ways out this paper focuses on the apparent bulimia of us consumers and its role in the recent crisis we seek to show how various characteristics of american society and the us economy are related to this phenomenon we illustrate some structural features of the us economy and public policies that may have created a difference in terms of patterns of consumption and market participation between the usa and continental europe we then present some explanations of us hyperconsumerism put forward by psychologists and sociologists thus relating this phenomenon to the decline in subjective well being and social capital documented in the usa we also discuss how the negative endogenous growth paradigm may help to account for it finally we review the debate on the us policy agenda by underlining some weaknesses in the two politically more realistic options and by outlining a third policy strategy which is possibly preferable for people s long term well being

labor supply elasticities overcoming nonclassical measurement error using more accurate hours data we measure the impact of measurement error in labor supply elasticities estimated over recalled usual work hours as is ubiquitous in the literature we employ data on hours of work in diaries collected by the american time use survey 2003 2015 along with the same respondents recalled usual work hours estimates using the latter yield elasticities that are positively biased we argue that this bias arises from the salient effects of differences in wage rates on recalled hours abstract from author

games parents and adolescents play risky behaviors parental reputation and strategic transfers this article examines parental reputation formation in intra familial interactions in a repeated two stage game children decide whether to drop out of high school or daughters decide whether to have births as teens and parents then decide whether to provide support to their children beyond age 18 drawing on milgrom and roberts 1982 and kreps and wilson 1982 we show that under certain conditions parents have the incentive to penalise older children for their adolescent risk taking behaviour in order to dissuade their younger children from such behaviour when reaching adolescence we find evidence in favour of this parental reputation model

tariffs quotas and piecemeal policy reform abstract this paper extends recent results on the welfare implications of piecemeal tariff adjustments to include cases where the initial trade distortions involve both tariffs and quotas it shows that the standard prescriptions for piecemeal tariff reform are largely unaffected by the presence of unalterable quotas on other goods prescriptions for piecemeal quota reform are also derived although they are constrained by the presence of unalterable tariffs

tough love and intergenerational altruism tough love and intergenerational altruism this article develops and studies a tough love model of intergenerational altruism we model tough love by modifying the barro becker standard altruism model in two ways first the child s discount factor is endogenously determined so lower childhood consumption leads to a higher discount factor later in life second the parent evaluates the child s lifetime utility with a constant high discount factor our model predicts that parental transfers will fall when the child s discount factor falls this is in contrast with the standard altruism model which predicts that parental transfers are independent of exogenous changes in the child s discount factor

wage discrimination in the reemployment process this paper examines wage discrimination by gender in the reemployment market by looking at the experiences of unemployed individuals and decomposing their wage gap upon reemployment the neumark decomposition technique is extended to incorporate selectivity and counter factual estimates are used to explain the development of the wage gap over time whereas total discrimination upon reemployment is declining over time the part directly attributable to hiring is increasing policy makers should consider that employers constrained by existing legislation that does not address hiring issues directly are switching over to discriminatory hiring practices that are becoming relatively easier to adopt less likely to be detected and harder to prove in a court of law

a note on male female wage differences in west germany this paper examines wage discrimination by gender in the reemployment market by looking at the experiences of unemployed individuals and decomposing their wage gap upon reemployment the neumark decomposition technique is extended to incorporate

the role of preferences and opportunity costs in determining the time allocated to housework the time devoted to housework in couple households is substantial research on intrahousehold time allocations has generally assumed that housework is a necessary evil and that the partner with the lower opportunity cost of time in the market will devote more time to home production in reality households individuals are likely motivated to maximize happiness and preferences regarding even mundane household chores differ considerably we use information on preferences opportunity costs and time use from the 2000 2001 united kingdom time use survey to examine the time partners spend doing laundry ironing cleaning and food shopping while compared with other household chores such as gardening and do it yourself repairs the selected activities are generally less enjoyable preferences do vary across the population and are correlated with reported time use joint multivariate analysis of his and her time on weekend and weekday days as well as maid service reveals that her opportunity cost of time matters substantially more than his but that his preferences play a greater role than hers

an equilibrium model of child maltreatment we propose a dynamic equilibrium model of human capital development of a child that can explain why a parent child relationship might lead to child maltreatment assuming that a parent cannot observe a child s human capital accumulation or effort and that the child s time preference develops endogenously an unstable path of the parent s beliefs regarding the child can persist in equilibrium when the parent faces a high degree of uncertainty in inferring the child s human capital the parent with an initial high estimate of the human capital then tends to underestimate the child s effort which results in persistently punitive abusive nteractions

the stress cost of children on moms and dads abstract we use longitudinal data describing couples in australia from 2001 to 12 and germany from 2002 to 12 to examine how demographic events affect mothers and fathers perceived time and financial stress consistent with the view of measures of stress as proxies for lagrangean multipliers in models of household production we show that births increase time stress especially among mothers and that the effects last at least several years births also slightly raise both parents financial stress while the departure of a child from the home reduces parents time stress its negative impacts on the tightness of the time constraints are much smaller than the positive impacts of a birth

quotas and the second best abstract this note makes two observations about trade restrictions on subgroups of commodities first unlike tariffs unalterable quotas provide no second best justification for general restrictions second the optimal allocation of intra subgroup trade depends on the form of restraint imposed

gender piece rates and wages evidence from matched employer employee data why are women disproportionately on piece rates we investigate three possible explanations 1 women are more likely to be on piece rates because they have a shorter expected tenure than men 2 a greater demand for flexibility between work and home attracts women to work place technologies suitable for variable pay based on individual performance 3 women prefer piece rates because they are subject to less wage discrimination when objective performance measures are available the weight of our empirical evidence supports the third hypothesis the unexplained gender wage gap is substantially smaller in the piece rate regime than in the time wage regime copyright 2004 oxford university press

gender agricultural production and the theory of the household virtually all models of the household assume that the allocation of resources is pareto efficient within many african households agricultural production occurs on many plots controlled by different members of the household pareto efficiency implies that factors should be allocated efficiently across these plots i find in contrast that plots controlled by women are farmed much less intensively than similar plots within the household controlled by men the estimates imply that about 6 percent of output is lost because of inefficient factor allocation within the household the paper suggests a new approach to modeling intrahousehold allocation consistent with the empirical results

an incentive model of the effect of parental income on children economists explain the positive relationship between parental income and children s outcomes using an investment model building on work in psychology and sociology this paper emphasizes the importance of child rearing practices which vary with income i argue that parents ability to mold their children s behavior through pecuniary incentives is limited at low incomes leading to lower outcomes and increased reliance on nonpecuniary mechanisms such as corporal punishment my model generates a positive relationship between parental income and children s outcomes especially at low incomes and endogenously produces a relationship between parental income and child rearing practices empirical work confirms these implications

tough love and intergenerational altruism this chapter develops and studies a tough love model of intergenerational altruism we model tough love by modifying the barro becker standard altruism model in two ways first the child s discount factor is endogenously determined so lower childhood consumption leads to a higher discount factor later in life second the parent evaluates the child s lifetime utility with a constant high discount factor our model predicts that parental transfers will fall when the child s discount factor falls this is in contrast with the standard altruism model which predicts that parental transfers are independent of exogenous changes in the child s discount factor

domestic violence a nonrandom affair in this paper we develop and estimate a model of domestic violence we extend a noncooperative model of the family to include violence as a source of gratification and an instrument for controlling behavior we estimate the model by robust methods since the violence process appears to have a heavy tailed nonnormal error distribution we find that the properties of the equilibria depend on family income for low middle income families our results indicate an equilibrium in which one person s reservation utility constraint is binding whereas for higher income families both individuals may gain from the relationship

raising children to work hard altruism work norms and social insurance children who can count on support from altruistic parents may not try hard to succeed in the labor market moreover parental altruism makes withdrawal of such support non credible to promote work

black hole tariffs and endogenous policy theory political economy in general equilibrium preface acknowledgments list of results 1 a preview of the results 2 endogenous policy theory a diagrammatic approach part i endogenous policy theory with specific factors the theory of industry tariffs in partial equilibrium 3 the probabilistic voting model of political efficiency and powerless politicians 4 endogenous lobbying theory and the contribution specialization theorem 5 endogenous tariff theory 6 the power function model of endogenous industry lobbying 7 three simple tests of the stolper samuelson theorem 8 the invisible foot and the waste of nations lawyers as negative externalities part ii endogenous policy theory in general equilibrium a long run theory of national tariff levels 9 the 2 x 2 x 2 x 2 model of endogenous redistribution theory 10 a prisoner s dilemma theory of endogenous protection the leontief model 11 the compensation effect and the multiple equilibrium trap 12 increasing returns to politics and factor endowments economic development and brazilian vitality versus the indian disease 13 endogenous protection in the united states 1900 88 14 a cobb douglas model 15 black hole tariffs 16 the endowment effect cross national evidence on endogenous tariffs part ii postscript 17 the senile industry argument for protection 18 optimal obfuscation and the theory of the second worst the politically efficient policy mathematical appendices references author index subject index

religious participation and children s education a social capital approach abstract based on the argument in both economic and sociological literature that religion is conducive to children s human capital formation this paper provides a model of religious participation and explores a mechanism that social capital affects children s education a la coleman coleman j s 1988 social capital in the creation of human capital american journal of sociology 94 s95 s120 the model generates several interesting implications which help explain some important stylized facts about education and religion further in a dynamic setting the model shows that there exists a steady state in which individuals allocate a positive amount of time and resources to religious activities thus it complements the existing literature to explain why seemingly unproductive religions can be everlasting

evidence on the volunteer labor supply of married women 1 introduction in this paper i investigate the volunteer labor supply of married women there are dozens of studies that examine the labor supply of married women and a smaller number that investigate the supply of volunteer labor in general as far as i know there are none that have focused on the supply of volunteer labor by married women i analyze time diary data for the 1970s to consider one main question and three subsidiary questions i what was the direct effect of economic variables after tax wage rate and other income on married women s volunteering both participation and hours ii does the number of children in the family influence the volunteering of married women to the extent that rising wages may induce smaller family size is this an indirect channel that reduces volunteering if one of the motivations for volunteering is to increase the quantity or quality of activities for one s own children the 1970s is an especially interesting time period to examine in the united states as that was the decade that saw the first large increases in married women s labor force participation rates iii are time and donations substitutes or complements for married women iv do the data support the brown and lankford 1992 modeling conjecture concerning a sequence of time allocation decisions as opposed to the gronau model of household time allocation where such decisions are made simultaneously gronau 1986 i find that i the volunteer labor supply for married women is positively sloped and inelastic with an estimated wage elasticity of 0 64 rises in the net wage have a small negative effect on married women s participation in volunteer activities a 25 rise in the net wage is associated with a 1 drop in the probability of volunteering there is a small negative other income from assets and husband s earnings elasticity of volunteer labor supply 0 09 so other sources of income mattered for married women s volunteering in the 1970s the effect of other income on married women s volunteer participation is positive ii having more children increases the probability of volunteering but reduces the number of hours volunteered iii donations of time and money appear to be substitutes overall the elasticity of married women s volunteer hours with respect to the tax price of giving is greater than two the participation effect is again negative this result is tentative because the data are not based on tax return information and i lack good information on cash donations iv there is mixed support for the brown and lankford conjecture the finding of a positive wage elasticity of volunteer labor supply is at odds with the opportunity cost of time interpretation of the wage especially as the finding for other income is also negative implying that volunteer hours are an inferior good substitution and income effects would therefore both be in a negative direction as the net wage rises the results with the sequential specification are sensible and easily interpreted but the key parameter estimate does not quite meet conventional standards of statistical significance increased hours of work decrease married women s participation and hours an added test of the sequential model is less favorable the wage findings suggest that rising wages for women caused a reduced incidence of volunteering among married women but if anything increased the hours of volunteering one possible vehicle for this would be the entry of women into professional careers where volunteering is a normal part of the career another possible explanation is that married women with a loose attachment to volunteering stopped volunteering and those married women with greater attachment to volunteering increased their hours commitments to offset the participation effect the link between children and volunteering is important as an indicator of how much selfinterest is involved in volunteering for example school volunteering may be a way of providing enhanced investment in one s own children where the benefit to others is a by product

economics coursework and long term behavior and experiences of college graduates in labor markets and personal finance i introduction if economics is a unique way of thinking as many economists like to claim some level of coursework in economics may provide enough specific knowledge and skills to lead students to make different choices in their adult roles as consumers workers and voters citizens of course the same could be claimed for training in business and other areas even though or perhaps because it could be argued that most content and training in business courses is more applied and pragmatic than what is presented in economics courses some empirical evidence though not really a great deal suggests that training in economics and business is associated with different adult behaviors and outcomes for example golec 1996 finds that mutual funds perform better if mutual fund managers have an mba and chevalier and ellison 1999 also report a positive correlation between mutual fund performance and the educational background of mutual fund managers black sanders and taylor 2003 found that economics majors earn almost 20 more than graduates in other social science majors and about 10 more than those who major in business administration in fields with large numbers of graduates they find that only engineering majors earn more than economics majors similarly hecker 1995 reported that males majoring in economics had median earnings 3 higher than all majors for the age cohort of 25 34 and 53 more than average for the cohort aged 35 44 craft and baker 2003 find that lawyers with an undergraduate major in economics earn 13 more than otherwise comparable lawyers with other undergraduate majors and economics is the only major with a statistically significant effect on earnings 1 hamermesh and donald 2008 however find that higher earnings by economics majors are partly due to economics majors working more hours than others the relationship between financial literacy knowledge and adult behavior and outcomes in financial markets has been addressed in several recent studies many sponsored by federal reserve banks hilgert hogarth and beverly 2003 and braunstein and welch 2002 find that knowledge about credit saving and investment is significantly related to recommended financial practices in cash flow management credit management saving and investment unfortunately there is also evidence of widespread financial illiteracy in u s households and particularly among elderly women see lusardi and mitchell 2007 2008 employee education programs have been found to affect workers savings retirement and investment behaviors bayer bernheim and scholz 2009 bernheim and garret 2003 state mandates for precollege education in personal finance appear to succeed in at least exposing students to more information and sources on financial education and students from states with such mandates report higher levels of savings and net worth as adults bernheim garrett and maki 2001 tennyson and nguyen 2001 much less research exists linking college coursework or majoring in economics to personal finance outcomes 2 but christiansen joensen and rangvid 2008 find that those trained in economics in college courses or employee education programs are more likely to invest in stocks than those who receive training in other areas guiso and jappelli 2005 report that among college graduates having a degree in economics is positively associated with knowledge about financial assets chert and volpe 1998 107 concluded that business majors had better knowledge about personal financial literacy than other students but that in general college students were not knowledgeable about personal finance 3 in this paper we use a large and unique data set to investigate the relationships between taking college coursework in economics or majoring in economics with long term labor market and personal finance behaviors and outcomes our information on long term behaviors and outcomes is drawn from a detailed questionnaire we mailed in january 2003 to over 25 000 graduates who attended four public universities in 1976 1986 or 1996

power politics and international trade r recent literature attributes the relative scarcity of open international markets to the prisoner s dilemma structure of state preferences with respect to trade we argue that the prisoner s dilemma representation does not reflect the most critical aspect of free trade agreements in an anarchic international system namely their security externalities we consider these external effects explicitly doing so leads us to two conclusions 1 free trade is more likely within rather than across political military alliances and 2 alliances are more likely to evolve into free trade coalitions if they are embedded in bipolar systems than in multipolar systems using data drawn from an 80 year period beginning in 1905 we test these hypotheses the results of the analysis make it clear that alliances do have a direct statistically significant and large impact on bilateral trade flows and that this relationship is stronger in bipolar rather than in multipolar systems in the early 1970s students of international relations began what would become a long and heated debate about the political correlates of open international markets recently however an important element of consensus has begun to emerge most contributors to this debate now seem to agree that the prisoner s dilemma structure of state preferences with respect to trade explains the relative dearth of open international markets here we argue that what has become the standard prisoner s dilemma representation neglects the most critical aspect of free trade agreements in the anarchic international system namely their security externalities we consider these external effects explicitly in order to do so we construct and analyze a simple game theoretic model the results of this analysis demonstrate that tariff games between allies differ systematically from those played between actual or potential adversaries these differences imply that free trade is more likely within rather than across political military alliances however our analysis also suggests that the evolutionary prospects of alliances vary those that are the products of bipolar systems are more likely to evolve into free trade coalitions than are their multipolar counterparts less credible exit threats and clearer responsibilities for alliance stability explain the advantage of a bipolar system we test this argument using data drawn from an 80 year period beginning in 1905 the empirical analysis supports our argument it demonstrates that alliances have a direct statistically significant and large effect upon bilateral trade moreover it shows that on average alliances have a much stronger effect on trade in a bipolar than in a multipolar world 2

a dynamic quantity adjustment process in a small open economy and welfare effects of tariff changes abstract considered an n good small open economy where the technology is strictly convex and ad valorem tariffs are imposed in this world it is known that the tariff utility relationship may be perverse the fact is known as the vanek bhagwati paradox the source of the perversity is found in aggregate income effects the present paper shows that d stability of our dynamic system implies non perverse aggregate income effects and hence the non perverse tariff utility relationship

can buy me love the effect of child welfare expenditures on maltreatment outcomes i consider the effect of state level child welfare expenditures on child abuse victimization and fatality rates the main result is that these expenditures are strongly associated with improved child maltreatment outcomes further the well known negative association between income and child abuse is overstated if one fails to control for relevant policy differences that are correlated with economic circumstances the effect of income diminishes further upon controlling for social attitudes correlated with income the source of identification is a set of large and explicitly exogenous changes in child welfare expenditures induced by the circa 2000 recession i show that endogeneity problems are small and tend to work against the result

on the theory of piecemeal tariff reform the case of pure imported intermediate inputs what is the effect of a tariff reduction that applies only to a subset of commodities subject to tariffs this important question was addressed systematically for the first time by james meade 1955 ch 13 in his classic work trade and welfare after a careful analysis meade concluded t here is more likely to be a gain in economic welfare if the rate of duty is high on the primary imports which will come in in increased volume and is low on the secondary imports which will come in in reduced volume p 208 this result was proved formally by trent j bertrand and jaroslav vanek 1971 who demonstrated that in a small open economy if the highest tariff rate is reduced to the next highest one welfare will rise provided the import demand for the good with the highest tariff exhibits gross substitutability with respect to all other goods 2 subsequently following a different strand of the literature as exemplified in john green 1961 tatsuo hatta 1973 1977 and peter lloyd 1974 independently proved similar results in terms of hicksian substitutability 3 in deriving their results bertrand and vanek allowed for the use of final goods as intermediate inputs i e interindustry flows 4 however neither they nor the subsequent writers including hatta and lloyd allowed for the existence of pure imported intermediate inputs that are not produced domestically therefore a natural question is whether the piecemeal policy prescription derived by them remains valid in the presence of pure imported intermediates this question is particularly important for developing countries for two reasons first by far the bulk of the imports of developing countries are intermediate and capital goods according to the world bank during the period 1975 1985 50 percent of developing countries imports were accounted for by intermediate inputs and an additional 30 percent were capital goods a sizable proportion of both capital and intermediate goods are neither produced nor directly consumed in these countries second the meade bertrand vanekhatta lloyd result has been the cornerstone of trade policy reform in many developing countries especially during the last decade in most countries trade reform has been based on the so called concertina approach under which the highest tariffs are reduced to the next highest ones and then to the next highest ones and so on thus lopez professor department of agricultural and resource economics university of maryland college park md 20742 and consultant trade policy division world bank 1818 h street n w washington dc 20433 panagariya senior economist trade policy division world bank 1818 h street n w washington dc 20433 and professor department of economics university of maryland college park md 20742 the findings interpretations and conclusions in this paper are entirely those of the authors they do not necessarily represent the views of the world bank its executive directors or the countries they represent the authors are indebted to two referees and tatsuo hatta for valuable comments on an earlier draft iin this quotation primary imports refers to the goods on which tariffs are reduced while secondary imports refers to other importables subject to tariffs 2robert lipsey and kelvin lancaster 1956 had proved the basic result of bertrand and vanek in a one factor three good model with a cobb douglas utility function 3more recently takashi fukushima 1979 has proved the validity of the hatta lloyd result when the highest tariff is shared by several commodities while rodney falvey 1988 has done the same in the presence of quantitative restrictions on imports 4although hatta 1973 1977 did not allow explicitly for interindustry flows his results can also be shown to be valid in the presence of such flows

noncooperative bargaining models of marriage in this paper we discuss some simple noncooperative models of distribution within marriage in which the equilibria are not necessarily pareto optimal in which history and culture can affect which equilibrium is realized and in which distribution may depend on whether resources are controlled by the husband or by the wife recent moves away from single decision maker models of the family have permitted economists to address distribution within marriage and cooperative bargaining models have played the central role in these moves the next step is to permit strategic interaction between family members by modeling distribution within marriage as a noncooperative game noncooperative game theory allows great flexibility in specifying the rules of the game and unlike cooperative game theory imposes few a priori restrictions on the nature of equilibrium outcomes in particular noncooperative models neither assume nor imply that all equilibria are pareto optimal

how serious is the neglect of intrahousehold inequality in this report the authors develop a framework for assessing the consequences of ignoring intrahousehold inequality in the measurement and analysis of poverty and inequality they apply this framework to data for the philippines and conclude that 1 the result of neglecting intrahousehold inequality will probably be considerable understatement of the levels of poverty and inequality with the philippine data measured levels of inequality and poverty were off 30 percent as a result of ignoring intrahousehold variation and 2 patterns of inequality revealed by household level data are somewhat different from patterns revealed by individual level data but the differences seem not to be dramatic to confirm these results the exercise should be repeated with data from other countries

domestic opposition and signaling in international crises this article explores the effect of domestic political competition on the escalation of international crises it combines an incomplete information model of crisis bargaining with a simple model of two party electoral choice one state has two strategic actors a government and an opposition party both of which declare openly whether they support the use of force to alter the status quo the rival state updates its beliefs and selects its strategy in response to both signals the parties payoffs depend upon a retrospective evaluation by the domestic electorate the model shows that the inclusion of a strategic opposition party decreases the ex ante probability of war by helping to reveal information about the state s preferences this finding has important implications for research on democracy and international conflict since it suggests a mechanism through which democratic states can overcome informational asymmetries which have been identified as a central obstacle to negotiation

taxes and transfers their effects on the decision to end a marriage abstract the transfer system typically has large marriage disincentives while the income tax system is likely to subsidize marriage for many low income families in other words the tax system may offset an increase in transfer benefits associated with marital separation the interaction of the transfer system with the income tax system has largely been overlooked the income tax system has become more relevant for low income families with the recent expansion of the earned income tax credit which filers may be eligible for even if their tax liability is zero this paper uses family level measures of the change in transfer benefits and tax liability associated with a change in family structure to consider the effect of these financial incentives on separation decisions

stressed out on four continents time crunch or yuppie kvetch social commentators have pointed to the problems of citizens of industrialized countries especially working women who face time stress an absence of sufficient time to accomplish all their tasks an economic theory views time stress as an increasing function of the shadow price of time and suggests it will be more prevalent in households with higher incomes and whose members work longer in the market or on required homework evidence from microeconomic data sets for australia germany korea and the united states corroborates this view adults in higher income households perceive more time stress in the united states a move from the 25 th to the 75 th percentile of the income distribution raises time stress by half as much as an interquartile change in weekly market work the relative effects of increased income compared to increased market work are larger in germany smaller in australia and roughly the same in korea time stress is part time crunch but much is also part yuppie kvetch

the demand for variety a household production perspective abstract economists have devoted substantial attention to firms supply of variety but little to consumers demand for variety employing the framework of home production we trace differences in demand to differences in the opportunity costs of activities associated with investments in human capital schooling alters time costs and changes the variety of activities household members choose time budgets from australia israel and west germany show that higher own and spouses incomes raise variety suggesting positive income effects education increases variety independent of income and earnings part of its impact goes beyond a correlation of educational attainment with preferences for variety

collective labor supply and welfare the paper develops a general collective model of household labor supply in which agents are characterized by their own possibly altruistic preferences and household decisions are only assumed to be pareto efficient an alternative interpretation is that there are two stages in the internal decision process agents first share nonlabor income according to some given sharing rule then each one optimally chooses his or her own labor supply and consumption this setting is shown to generate testable restrictions on labor supplies moreover the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule up to a constant finally the traditional tools of welfare analysis can be adapted to the new setting

strategic behavior and marriage payments theory and evidence from senegal abstract this article proposes an original theory of marriage payments based on insights gained from firsthand information collected in the senegal river valley this theory postulates that decisions about the bride price which are made by the bride s father take into account the likely effects of the amount set on the risk of ill treatment of the wife and the risk of marriage failure based on a sequential game with three players the bride s father the husband and the wife and a matching process it leads to a number of important predictions that are tested against senegalese data relating to bride prices and various characteristics of women the empirical results confirm that parents behave strategically by keeping bride prices down so as to reduce the risk of marriage failure for their daughters other interesting effects on marriage payments and the probability of separation are also highlighted stressing the role of the bride s bargaining power in her own family

a fresh look at the rotten kid theorem and other household mysteries gary becker s rotten kid theorem asserts that if all family members receive gifts of money income from a benevolent household member then even if the household head does not precommit to an incentive plan for family members it will be in the interest of selfish family members to maximize total family income i show by examples that the rotten kid theorem is not true without assuming transferable utility i find a simple condition on utility functions that is necessary and sufficient for there to be the kind of transferable utility needed for a rotten kid theorem while restrictive these conditions still allow one to apply the strong conclusions of the rotten kid theorem in an interesting class of examples

the schooling decision family preferences intergenerational conflict and moral hazard in the brazilian favelas this paper experimentally analyzes the schooling decisions of poor households in urban brazil we elicit parents choices between monthly government transfers conditional on their adolescent child attending school and guaranteed unconditional transfers of varying sizes in the baseline treatment an overwhelming majority of parents prefer conditional transfers to larger unconditional transfers however few parents prefer conditional payments if they are offered text message notifications whenever their child misses school these findings suggest important intergenerational conflicts in these schooling decisions a lack of parental control and observability of school attendance and an additional rationale for conditional cash transfer programs the monitoring they provide

trade reform with quotas partial rent retention and tariffs quotas are the predominant means of protection in developed countries with quota rents commonly shared between exporter and importer this paper derives shadow prices appropriate to evaluating trade reform under these circumstances and provides a number of useful sufficient conditions for welfare improving piecemeal reform in doing so the authors apply the distorted quantity constrained expenditure function and use implicit separability to derive more powerful results than have previously been available

household portfolio choice and retirement this study examines household portfolio choice through the retirement transition i show that couples significantly decrease their stock allocations after retirement whereas singles allocations remain relatively unchanged reallocations are concentrated among couples in which the wife is more risk averse than her husband husbands and wives respective retirement events are followed by opposite signed changes in stock allocations these findings are consistent with a model of collective household decision making in which spouses have heterogeneous risk preferences and suggest that dynamics in the distribution of intrahousehold bargaining power generate time varying household risk aversion

testing for educational credit constraints using heterogeneity in individual time preferences i develop a model in which individual time discount rates have a larger effect on human capital accumulation when credit constraints are binding impatient individuals obtain less schooling when borrowing constraints limit the ability to finance consumption during school using data from the nlsy79 i show that self reported measures of time preferences have a significantly higher effect on the college attendance decisions of blacks than those of whites and the decisions of low income youths than those of high income youths these results provide new evidence that members of disadvantaged groups obtain lower levels of schooling because they are credit constrained

women s income and boy girl anthropometric status in the cote d ivoire abstract this paper examines the effects of the intrahousehold distribution of income on children s anthropometric status in the c te d ivoire we find that increases in the proportion of cash income accruing to women increases boys height for age relative to girls and that this effect is statistically significant we suggest that this result may reflect efficiency and equity concerns which in this case reinforce each other