household choices and child development the growth in labor market participation among women with young children has raised concerns about the potential negative impact of the mother s absence from home on child outcomes recent data show that mother s time spent with children has declined in the last decade while the indicators of children s cognitive and noncognitive outcomes have worsened the objective of our research is to estimate a model of the cognitive development process of children nested within an otherwise standard model of household life cycle behavior the model generates endogenous dynamic interrelationships between the child quality and employment processes in the household which are found to be consistent with patterns observed in the data the estimated model is used to explore the eects of schooling subsidies and employment restrictions on household welfare and child development

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

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

sons daughters and parental behaviour the prevalence of son preference and its implications for family behaviour in developing countries have received a great deal of scholarly attention but child gender bias is believed to be empirically unimportant in wealthy non traditional societies studies by sociologists and psychologists during the past 30 years however have documented consistent discrepancies between the behaviour of parents of sons and parents of daughters boys tend to increase marital stability and marital satisfaction relative to girls and fathers spend more time with and are more involved with sons than daughters in recent years economists have begun to contribute to the child gender literature re examining the effects of sons and daughters on family structure and parental involvement with larger samples and greater concern for possible sources of selection bias other economic outcomes such as market work and earnings have also been studied and some investigators have exploited the randomness of child gender as a source of exogenous variation in parental behaviour in general recent results suggest that child gender does affect family stability and the time allocation of parents but it is not clear whether these responses reflect parental preferences for boys rather than girls or differences in the constraints parents face copyright 2005 oxford university press

towards causal estimates of children s time allocation on skill development cognitive and noncognitive skills are critical for a host of economic and social outcomes as an adult while there is broad agreement that a significant amount of skill acquisition and development occurs early in life the precise activities and investments that drive this process are not well understood in this paper we examine how children s time allocation affects their accumulation of skill children s time allocation is endogenous in a model of skill production since it is chosen by parents and children we apply a recently developed test of exogeneity to search for models that yield causal estimates of the impact time inputs have on child skills we show that the test which exploits bunching in time inputs induced by a non negativity time constraint has power to detect endogeneity stemming from omitted variables simultaneity measurement error and several forms of model misspecification we find that with a sufficiently rich set of controls we are unable to reject exogeneity in our most detailed production function specifications the estimates from these models indicate that active time with adult family members such as parents and grandparents are the most productive in generating cognitive skill

do parental time investments react to changes in child s skills and health abstract parental time investment decisions have been found to have important effects on child development however little is known about the response of parents to changes in their child s human capital across time using the longitudinal study of australian children we measure time investments considering the time young children spend with or without parents in different activities by adopting a child fixed effect instrumental variable estimation we find that parents reinforce for high socio emotional skills by spending more time socialising with their child and compensate for low cognitive skills by increasing the time the child spends in learning activities

target zones and exchange rate dynamics this paper develops a simple model of exchange rate behavior under a target zone regime it shows that the expectation that monetary policy will be adjusted to limit exchange rate variation affects exchange rate behavior even when the exchange rate lies inside the zone and is thus not being defended actively somewhat surprisingly the analysis of target zones turns out to have a strong formal similarity to problems in option pricing and investment under uncertainty

the career costs of children this paper analyzes the life cycle career costs associated with child rearing and decomposes their eects into unearned wages as women drop out of the labor market loss of human capital and selection into more child friendly occupations we estimate a dynamic life cycle model of fertility occupational choice and labor supply using detailed survey and administrative data for germany for numerous birth cohorts across dierent regions we use this model to analyze both the male female wage gap as it evolves from labor market entry onward and the eect of pro fertility policies we show that a substantial portion of the gender wage gap is explainable by realized and expected fertility and that the long run eect of policies encouraging fertility are considerably lower than the short run eects typically estimated in the literature

nutrition information and household behavior experimental evidence from malawi incorrect knowledge of the health production function may lead to inefficient household choices and thereby to the production of suboptimal levels of health this paper studies the effects of a randomized intervention in rural malawi that over a six month period provided mothers of young infants with information on child nutrition without supplying any monetary or in kind resources a simple model first investigates theoretically how nutrition and other household choices including labor supply may change in response to the improved nutrition knowledge observed in the intervention areas we then show empirically that the intervention improved child nutrition household food consumption and consequently health we find evidence that labor supply increased which might have contributed to partially fund the increase in food consumption this paper is the first to study whether non health choices particularly parental labor supply might be affected by parents knowledge of the child health production function

early childhood education and economic growth abstract we study the effects of early childhood skill formation on productivity and schooling we add early childhood human capital to a standard continuous time life cycle economy and assume complementarity between educational stages agents are homogenous and choose the intensity of preschool education how long to stay in formal school labor effort and consumption the model is calibrated to the us from 1961 to 2008 and matches the data very well and closely reproduces the paths of schooling hours worked relative prices and gdp we find that early childhood education can explain a large part of the observed increase of years of schooling in the u s since 1961 and it was as important as formal education for the increase of labor productivity in the period furthermore we show that small reallocations of public expenditures from formal education to early childhood education would have sizable impacts on income per capita and productivity

early maternal time investment and early child outcomes using large longitudinal survey data from the uk millennium cohort study this article estimates the relationship between maternal time inputs and early child development we find that maternal time is a quantitatively important determinant of skill formation and that its effect declines with child age there is evidence of long term effects of early maternal time inputs on later outcomes especially in the case of cognitive skill development in the case of non cognitive development the evidence of this long term impact disappears when we account for skill persistence

on the intergenerational transmission of economic status we present a model in which human capital investments occur over the life cycle and across generations a la becker and tomes the human capital technology features multiple stages of childhood investments college and life cycle accumulation the model can explain a wide range of intergenerational relationships while remaining empirically consistent with cross sectional inequality much of the latter is determined by early investments in children so that borrowing constraints faced by young parents are important for understanding the persistence of economic status across generations education subsidies especially early on can significantly reduce the intergenerational persistence of economic status

evaluating the effects of childcare policies on children s cognitive development and maternal labor supply to explore the role of childcare policies in the development of early cognitive skills this paper jointly estimates a cognitive achievement production function and a dynamic discrete choice model of maternal labor supply and childcare decisions using counter actuals from the model i investigate how the designs of two childcare programs head start and childcare subsidies affect the formation of cognitive skills through maternal work and childcare decisions the results suggest large impacts on cognitive skills from expanding head start to current noneligibles and negligible impacts of subsidies on cognitive skills of current eligibles abstract from author

does the balance of power within a family matter the case of the retirement equity act abstract this paper studies within family decision making regarding investment in income protection for surviving spouses using a simple and tractable nash bargaining model a change in us pension law the retirement equity act of 1984 is used as an instrument to derive predictions from the bargaining model about the household demand for survivor annuities and life insurance and to contrast these with the predictions of the classical single utility function model of the household in the empirical part of the paper the predictions of the classical model are rejected in favor of the predictions of the nash bargaining model

ability parental valuation of education and the high school dropout decision we use a large rich canadian micro level dataset to examine the channels through which family socio economic status and unobservable characteristics aect children s decisions to drop out of high school first we document the strength of observable socio economic factors our data suggest that teenage boys with two parents who are themselves high school dropouts have a 16 chance of dropping out compared to a dropout rate of less than 1 for boys whose parents both have a university degree we examine the channels through which this socio economic gradient arises using an extended version of the factor model set out in carneiro hansen and heckman 2003 specically we consider the impact of cognitive and non cognitive ability and the value that parents place on education our results support three main conclusions first cognitive ability at age 15 has a substantial impact on dropping out second parental valuation of education has an impact of approximately the same size as cognitive ability eects for medium and low ability teenagers a low ability teenager has a probability of dropping out of approximately 03 if his parents place a high value on education but 36 if their education valuation is low third parental education has no direct eect on dropping out once we control for ability and parental valuation of education our results point to the importance of whatever determines ability at age 15 including potentially early childhood interventions and of parental valuation of education during the teenage years we also make a small methodological contribution by extending the standard factor based estimator to allow a non linear relationship between the factors and a covariate of interest we show that allowing for non linearities has a substantial impact on estimated eects

nash bargained household decisions reply pierre andre chiappori s 1988 claim that the nash bargaining model is of weak empirical relevance and neither convenient nor really restrictive is incorrect nash bargained household behavior implies a rich set of empirical implications extending well beyond the pareto efficiency of intrafamily distributions by systematically accounting for the impact of opportunities outside the family on resource distribution within the family nash bargained demand theory considerably expands the scope of neoclassical demand theory such expansion can elucidate issues ranging from the impact of alimony and child support laws in developed societies to the intrafamily distribution of nutrition in less developed countries copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the saving behaviour of a two person household the facts that wives are typically younger than their husbands and that women typically live longer than men imply that wives may have more incentive to save for old age than do husbands a theoretical model of the determination of household saving and portfolio choice is introduced which takes into account differences in preferences for saving the most important result is that the level and the composition portfolio of saving and the time path of consumption are dependent on the distribution of income within the household women typically live longer than men and wives are typically younger than their husbands these two facts imply that preferences about saving for old age in married households with forward looking members may differ between husband and wife this paper presents a theoretical analysis of saving and portfolio behaviour if the members of the household have differ ent preferences over future consumption as compared to current consump tion the analysis stands in contrast to unitary models of household intertemporal allocation which assume that the household has a single utility function thus this paper is a contribution in a novel context to the burgeoning literature on intra household decision making the base case analysis is for a simple two person husband and wife1 two period model in which there is only one asset saving it is assumed that because of the two facts given at the start of the introductory paragraph the husband discounts the future more than the wife in section ii the implications of a non cooperative decision making process for the base case are derived see ulph 1988 for a non cooperative model of demand and

the early bird gets the worm birth order effects in a dynamic family model the great advantage of living in a large family is that early lesson of life s essential unfairness nancy mitford http www quotegarden com family html i introduction birth order effects well established in both the academic and the popular psychology literature have received considerable attention in recent empirical economics studies for example ejrnaes and portner 2004 black devereux and salvanes 2005 conley and glauber 2006 and kantarevic and mechoulan 2006 find significant differences between firstborn and later born children in outcomes such as educational attainment and or earnings price 2008 finds differences in inputs in general the firstborn in the family is advantaged hanushek 1992 suggests that these differences arise because children of different birth order within the same family are born into different intellectual environments with later borns entering less stimulating environments price 2008 looks at quality time that parents spend with each child in multiple child families and finds that children of higher birth order receive less quality time with parents at any given age than do children of lower birth order at the same age zajonc 1976 suggests that older siblings partly replace parents in providing some of this quality time this benefits the firstborns because they have the opportunity to be teachers from an early age theoretical economic models of the family are typically atemporal when it comes to the decision of how much of the family s resources to devote to children and hence birth order effects do not emerge endogenously our article fills an important gap in the theoretical literature on families with children by explicit consideration of the temporal production of both the child s well being and its human capital and the influence of birth order on the production conditions for children who are close in age we show cases in which the firstborn receives more resources overall than the second so the second born never has higher utility than the firstborn at any stage proposition 1 in this case we can make clear predictions about outcomes as well as inputs and we would expect tests to reveal higher scores of the firstborn regardless of the age at which they are administered in other cases the mix of resources devoted to children differs with birth order with ambiguous predictions for outcomes at some ages propositions 2a and 3 or all ages see e g propositions 2b and 5 we investigate the trade off parents make between spending time with children and working for income to purchase consumption goods for family members we consider a three stage model of parental decision making a family has two children who are born sequentially older children have different needs than younger ones so the sequential nature of child rearing matters each child spends two periods with their parents the firstborn is a single child in its first period of life and an older sibling in its second and the second born is a younger sibling in its first period and the sole child in the household in its second thus each child spends one period with parents and a sibling and one period alone with its parents the children differ with respect to the sequencing of these two phases in the second period the presence of two children of different ages and with different needs but both requiring some supervision time raises the issue of economies of scope in childcare 1 is a given amount of parental childcare as productive if shared by two children rather than devoted to one there is little direct evidence on the nature of the home production function for child quality but mocan 1997 found evidence suggesting the existence of both scale and scope economies in the production functions for day care centers in the main body of the article we assume economies of scope for parents 2 parents care about both the contemporaneous utility of each child and their well being as adults we assume no societal or personal biases in favor of either child

an interpretation of recent research on exchange rate target zones how do exchange rate bands work compared to completely fixed rates between realignments or more precisely what are the dynamics of exchange rates interest rates and central bank interventions within exchange rate bands does the difference between bands and completely fixed exchange rates matter and if so which of the two arrangements is best or more precisely what are the tradeoffs that determine the optimal bandwidth this article will present an interpretation of some selected recent theoretical and empirical research on exchange rate target zones with emphasis on main ideas and results and without technical detail

do husbands and wives pool their resources evidence from the united kingdom child benefit common preference models of family behavior imply income pooling a restriction on family demand functions such that only the sum of husband s income and wife s income affects the allocation of goods and time testing the pooling hypothesis is difficult because most family income sources are not exogenous to the allocations being analyzed in this paper we present an alternative test based on a natural experiment a policy change in the united kingdom that transferred a substantial child allowance to wives in the late 1970s using family expenditure survey data we find strong evidence that a shift toward greater expenditures on women s clothing and children s clothing relative to men s clothing coincided with this income redistribution

how strong are bequest motives evidence based on estimates of the demand for life insurance and annuities this paper presents new empirical evidence in support of the view that a significant fraction of total saving is motivated by the desire to leave bequests specifically i find that social security annuity benefits significantly raise life insurance holdings and depress private annuity holdings among elderly individuals these patterns indicate that the typical household would choose to maintain a positive fraction of its resources in bequeathable forms even if insurance markets were perfect evidence on the relationship between insurance purchases and total resources reinforces this conclusion

partial insurance and investments in children this article studies the impact of permanent and transitory shocks to income on parental investments in children we use panel data on family income and an index of investments in children from the children of the national longitudinal survey of youth we find that there is partial insurance of parental investments against permanent income shocks but the magnitude of the estimated responses is small we cannot reject the hypothesis of full insurance against temporary shocks another interpretation of our findings is that insurance possibilities are limited but the fact that skill is a non separable function of parental investments over time results in small reactions of these investments to income shocks especially at later ages

the determinants of bargaining power in an empirical model of transfers between adult children parents and in laws for south korea abstract we derive a bargaining model of transfers between adult children and their parents and then estimate the model using data from south korea our analysis extends the literature on family bargaining by i arguing that transfers from the couple represent semiprivate consumption e g it is plausible that the wife cares more about her parents than about the husband s parents and vice versa and ii using results from laboratory experiments to help identify the model we find that women have slightly more bargaining power than men in the couple s decision making we also find that when an adult child receives an extra dollar of income she transfers half of it to her parents this result is consistent with previous work finally we reject the null hypothesis that bargaining power within the family depends only on the potential wage of each spouse

static and intertemporal household decisions we discuss the most popular static and dynamic models of household behavior our main objective is to explain which aspects of household decisions different models can account for using this insight we describe testable implications identification results and estimation findings obtained in the literature particular attention is given to the ability of different models to answer various types of policy questions

intergenerational transfers and savings in recent years the role of intergenerational transfers in the process of wealth accumulation has been the subject of substantial empirical and theoretical analysis the key question stimulating this research is what is the main explanation for savings is it primarily accumulation for retirement as claimed by albert ando richard brumberg and franco modigliani in their celebrated life cycle model of savings is it primarily intentional accumulation for intergenerational transfers or is it primarily precautionary savings much of which may be bequeathed because of imperfections in annuity markets this paper examines a range of findings on the importance of intergenerational transfers the strong conclusion that emerges from this evidence is that intergenerational transfers play a very important if not a key role in aggregate wealth accumulation while intergenerational transfers figure very large in savings the precise motivation for such transfers is unclear intergenerational altruism might appear the most likely candidate but at least sane stylized facts such as the equal allocation of bequests among children are strongly at adds with the altruism model other explanations involving imperfect insurance arrangements or payments for child services do not appear capable of explaining the substantial amounts of transfers actually observed sorting cut the relative contributions of different models to intergenerational transfers and the precise role of intergenerational transfers in the process of wealth accumulation remains an intriguing and exciting enterprise this abstract was borrowed from another version of this item

an up to date joint labor supply and child care choice model abstract norwegian parents of preschool children base their care choices on a completely different choice set from their predecessor now there is essentially only one type of nonparental care center based care and on the parental side fathers take a more pivotal role in early childhood care in the present paper we develop and estimate a joint labor supply and child care choice model that takes account of these new characteristics on the assumption that this model points to current and future modeling directions for several other economies too estimations suggest that the average wage elasticity for mothers is 0 25 0 30

correlation consumption confusion or constraints why do poor children perform so poorly the economic and social mobility of a generation may be largely determined by the time it enters school given early developing and persistent gaps in child achievement by family income and the importance of adolescent skill levels for educational attainment and lifetime earnings after providing new evidence of important differences in early child investments by family income we study four leading mechanisms thought to explain these gaps an intergenerational correlation in ability a consumption value of investment information frictions and credit constraints in order to better determine which of these mechanisms inf uence family investments in children we evaluate the extent to which these mechanisms also explain other important stylized facts related to the marginal returns on investments and the effects of parental income on child investments and skills

on the production of skills and the birth order effect first born children tend to outperform their younger siblings on measures such as cognitive exams wages educational attainment and employment using a framework similar to cunha and heckman 2008 and cunha heckman and schennach 2010 this paper finds that differences in parents investments across siblings can account for more than one half of the gap in cognitive skills among siblings the study s framework accommodates for endogeneity in parents investments measurement error missing observations and dynamic impacts of parental investments

birth spacing and sibling inequality asymmetric information within the family this paper formulates a dynamic model of birth spacing incorporating uncertainty about and heterogeneity in birth outcomes and joint production to assess how the spacing of children responds to exogenous shocks in birth outcomes estimation technics are developed that use assumptions about the constraints on the information available to parental decision makers associated with the sequential nature of childbearing ignored in static models of intra household behavior section 1 examines the technology of birth spacing and its consequences for the level and distribution of child outcomes and resources in section 2 the model compares alternative estimation technics in section 3 data from a probability sample of us white married couples are used to describe intrafamily variation in birth outcomes and spacing and to test for heterogeneity bias the results in section 4 suggest that across family heterogeneity bias may be less important than within family heterogeneity bias in estimates of the effects of birth order and timing patterns of births on health results from family fixed effect of sibling models of child quality determination that ignore intrafamily substitution may be misleading section 5 estimates how birth outcome endowments and information on gender are used to estimate how differences in them affect subsequent birth timing decisions and sibling inequality results suggest that 1 the birth of 1st born children tends to be delayed among families with high income husbands highly educated parents superior health endowment or high tastes for health investments 2 the proximity of the birth of the 2nd child to that of the 1st child is a positive function of the quality of the 1st born and 3 the spacing and existence of a 3rd child is significantly related to the birth outcomes sex composition and sex ordering of the 1st and 2nd children

personality traits intra household allocation and the gender wage gap abstract a model of how personality traits affect household time and resource allocation decisions and wages is developed and estimated in the model households choose between two behavioral modes cooperative or noncooperative spouses receive wage offers and allocate time to supplying labor market hours and to producing a public good personality traits measured by the so called big five traits can affect household bargaining weights and wage offers model parameters are estimated by simulated method of moments using the household income and labor dynamics in australia hilda data personality traits are found to be important determinants of household bargaining weights and of wage offers and to have substantial implications for understanding the sources of gender wage disparities

efficient intra household allocations a general characterization and empirical tests the neoclassical theory of demand applies to individuals yet in empirical work it is usually taken as valid for households with many members this paper explores what the theory of individuals implies for households that have more than one member we make minimal assumptions about how the individual members of the household resolve conflicts all we assume is that however decisions are made outcomes are efficient we refer to this as the collective setting we show that in the collective setting household demands must satisfy a symmetry and rank condition on the slutsky matrix we also present some further results on the effects on demands of variables that do not modify preferences but that do affect how decisions are made we apply our theory to a series of surveys of household expenditures from canada the tests of the usual symmetry conditions are rejected for two person households but not for one person households we also show that income pooling is rejected for two person households we then test for our collective setting conditions on the couples data none of the collective setting restrictions are rejected we conclude that the collective setting is a plausible and tractable next step to take in the analysis of household behavior

wealth health and child development evidence from administrative data on swedish lottery players we use administrative data on swedish lottery players to estimate the causal impact of substantial wealth shocks on players own health and their children s health and developmental outcomes our estimation sample is large virtually free of attrition and allows us to control for the factors conditional on which the prizes were randomly assigned in adults we find no evidence that wealth impacts mortality or health care utilization with the possible exception of a small reduction in the consumption of mental health drugs our estimates allow us to rule out effects on 10 year mortality one sixth as large as the crosssectional wealth mortality gradient in our intergenerational analyses we find that wealth increases children s health care utilization in the years following the lottery and may also reduce obesity risk the effects on most other child outcomes including drug consumption scholastic performance and skills can usually be bounded to a tight interval around zero overall our findings suggest that in affluent countries with extensive social safety nets causal effects of wealth are not a major source of the wealth mortality gradients nor of the observed relationships between child developmental outcomes and household income jel codes i10 i14 j24

fertility at work children and women s labor market outcomes in urban ghana abstract while it is commonly assumed that fertility decreases female labor supply i show theoretically that fertility can increase female labor supply if returns to financial inputs in children are sufficiently high compared to returns to time investments using six rounds of a panel survey from urban ghana i find evidence of countervailing effects behind a net zero effect of young children on women s hours of work labor supply on the extensive margin drops but women who remain in the labor force increase their hours in response to a child women s labor supply particularly increases in response to a young child if there are older siblings or other adults in the household by contrast men s labor supply does not change in response to young children

minding the gap between schools and universities abstract during the 2000s decade governments in south america reallocated per student public expenditures from tertiary to basic education potentially alleviating the economic gap between students in public schools and public universities to investigate the welfare and macroeconomic effects of such types of policies we build and calibrate a general equilibrium model using brazilian data from the beginning of the 2000s we find that the optimal utilitarian policy allocates per student public expenditures equally across education stages benefits almost the entirety of households delivers significant welfare gains to the poorest families and cuts back income inequality we also use our framework to investigate economic differences between brazil and the united states and find that differences in the supply of vacancies in public universities is the education policy aspect that alone has the highest explanatory power over aggregate earnings and college attendance differences between the two countries

divorce and the cognitive achievement of children children of divorced parents exhibit lower test scores and educational attainment have these correlations a causal interpretation parents who divorce may be less likely to invest in their children while together or they may divorce to shield their children from the effects of marital conflict i study the relationship between children s achievement and the marital status of their parents within a dynamic framework in which partners decide on whether to remain married how to interact with or without conflict and child investments i then assess whether a child whose parents divorced would have been better off had divorce not occurred

labor supply and household dynamics abstract using the panel study of income dynamics we provide evidence that to understand household decisions and evaluate policies designed to affect individual welfare it is important to add an intertemporal dimension to the by now standard static collective models of the household specifically we document that the observed differences in labor supply by gender and marital status do not arise suddenly at the time of marriage but rather emerge gradually over time we then propose an intertemporal collective model that has the potential of explaining the observed patterns

the more the merrier the effect of family size and birth order on children s education there is an extensive theoretical literature that postulates a tradeoff between child quantity and quality within a family however there is little causal evidence that speaks to this theory using a rich dataset on the entire population of norway over an extended period of time we examine the effects of family size and birth order on the educational attainment of children while we find a negative correlation between family size and children s education when we include indicators for birth order and or use twin births as an instrument family size effects become negligible in addition birth order has a significant and large negative effect on children s education we also study adult earnings employment and teenage childbearing and find strong evidence for birth order effects with these outcomes particularly among women these findings suggest the need to revisit economic models of fertility and child production focusing not only on differences across families but differences within families as well

family income and child outcomes in canada a positive relationship between income and child outcomes has been observed in data from numerous countries a key question concerns the extent to which this association represents a causal relationship as opposed to unobserved heterogeneity we use data from the national longitudinal survey of children and youth to implement a series of empirical strategies for estimating the existence and size of the effect of income on three measures of cognition our results indicate that the effect of income on these outcomes may well be positive but that it is likely to be smaller than conventional estimates jel classification i10 revenu des familles et comportement des enfants au canada il existe une relation positive entre le revenu des familles et les comportements des enfants dans les releves statistiques de nombreux pays une question centrale demeure jusqu a quel point est ce que cette correlation represente une relation causale par opposition a du bruit les auteurs utilisent l enquete longitudinale nationale sur les enfants et les jeunes elnej pour mettre en place une serie de strategies empiriques pour calibrer l existence et la taille de l effet de revenu sur trois mesures de cognition les resultats montrent que l effet de revenu sur ces comportements peut fort bien etre positif mais qu il est vraisemblablement plus faible que ce que suggerent les evaluations conventionnelles

how are preferences revealed revealed preferences are tastes that rationalize an economic agent s observed actions normative preferences represent the agent s actual interests it sometimes makes sense to assume that revealed preferences are identical to normative preferences but there are many cases where this assumption is violated we identify five factors that increase the likelihood of a disparity between revealed preferences and normative preferences passive choice complexity limited personal experience third party marketing and intertemporal choice we then discuss six approaches that jointly contribute to the identification of normative preferences structural estimation active decisions asymptotic choice aggregated revealed preferences reported preferences and informed preferences each of these approaches uses consumer behavior to infer some property of normative preferences without equating revealed and normative preferences we illustrate these issues with evidence from savings and investment outcomes

transfers to households with children and child development in this paper we utilize a model of household investments in the development of children to explore the impact of various transfer policies on the distribution of child outcomes we develop a cost criterion that can be used to compare the cost effectiveness of unrestricted restricted and conditional cash transfer systems and find that an optimally chosen conditional cash transfer program is the most cost efficient way to attain any given gain in average child quality we explore several design elements for the conditional cash transfer system and discuss the role of production function uncertainty and measurement error

early and late human capital investments borrowing constraints and the family we develop a dynastic human capital investment framework to study the importance of family borrowing constraints and uninsured labor market risk as well as the process of intergenerational ability

public good valuation and intra family allocation i derive values of marginal changes in a public good for two person households measured alternatively by household member i s willingness to pay wtp for the good on behalf of the household wtp i h or by the sum of individual wtp values across family members wtp c households are assumed to allocate their resources in efficient nash bargains over private and common household goods wtp i h is then defined by trade offs between the public good and the household good and wtp c by trade offs of between the public good and private goods wtp i h is found to be higher lower than wtp c when member i has a relatively high low marginal valuation of the public good but tends on average to equal wtp c as a consequence individuals tend to represent households correctly on average when questioned about the household s wtp for a public good even when they are purely selfish and answer truthfully adding all members wtp answers on behalf of the household then leads to double counting pure and paternalistic altruism the latter attached to consumption of the public good move each member s wtp on behalf of the household closer to the true sum of individual wtp but only paternalistic altruism raises this sum

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

simple tests of target zones the irish case in a small open economy with fixed exchange rates tandard theory suggests that domestic inflation and interest rates should equal those abroad in a credible target zone the same theories suggest that inflation and interest rates should be close here we seek to make precise this idea of limits on inflation and interest rate differentials consistent with limits on exchange rate movements we then examine the case of ireland which joined the exchange rate mechanism erm of the european monetary system ems in 1979 attracted by the prospects of lower german influenced inflation and interest rates we find in the early years of the erm both irish inflation and interest rastes were inconsistent with credibility of the exchange rate regime in he latter years from 1987 on rates were in the derived range around german rates

parental beliefs about returns to educational investments the later the better in this paper we study parental beliefs about the returns to parental investments made during different periods of childhood using two independent samples we document that parents perceive the returns to different late investments to be higher than the returns to early investments and that they perceive investments in different time periods as substitutes rather than complements we show that parental beliefs about the returns to investments vary substantially across the population and that individual beliefs are predictive of actual investment decisions moreover we document that parental beliefs about the productivity of investments differ significantly across socioeconomic groups perceived returns to early parental investments are positively associated with household income thereby potentially contributing to the intergenerational persistence in earnings