Publication:
Family Altruism and Incentives

dc.contributor.author Gatti, Roberta
dc.date.accessioned 2014-08-26T21:56:52Z
dc.date.available 2014-08-26T21:56:52Z
dc.date.issued 2000-12
dc.description.abstract The author builds on the altruistic model of the family, to explore the strategic interaction between altruistic parents, and selfish children, when children's efforts are endogenous. If there is uncertainty about the amount of income the children will realize, and if parents have imperfect information, the children have an incentive to exert little effort, and to rely on their parent's altruistically motivated transfers. Because of this, parents face a tradeoff between the insurance that bequests implicitly provide their children, and the disincentive to work prompted by their altruism. The author shows that if parents can credibly commit to a pattern of transfers, they will choose not to compensate children in bad outcomes, as much as predicted by the standard (no uncertainty, no asymmetric information) dynastic model of the family. Alternatively, parents may choose to forgo any insurance, and offer a fixed level of bequest, to elicit greater effort from their children. The optimal transfers structure that the author derives, reconciles the predictions of the altruistic family model, with much of the existing evidence on inter-generational transfers, which suggests that parents compensate only partially, or not at all, for earnings differentials among their children. Moreover, the author shows that Ricardian equivalence holds in this setup, except when non-negativity constraints are binding. en
dc.identifier http://documents.worldbank.org/curated/en/2000/12/828301/family-altruism-incentives
dc.identifier.uri http://hdl.handle.net/10986/19740
dc.language English
dc.language.iso en_US
dc.publisher World Bank, Washington, DC
dc.relation.ispartofseries Policy Research Working Paper;No. 2505
dc.rights CC BY 3.0 IGO
dc.rights.uri http://creativecommons.org/licenses/by/3.0/igo/
dc.subject ASYMMETRIC INFORMATION
dc.subject ATTENTION
dc.subject BENCHMARK
dc.subject BUDGET CONSTRAINTS
dc.subject COMMON GOOD
dc.subject CONFLICT
dc.subject DEBT
dc.subject DEMOGRAPHICS
dc.subject DIRECTIONAL FLOW
dc.subject ECONOMIC PERFORMANCE
dc.subject ELASTICITY
dc.subject EMPIRICAL EVIDENCE
dc.subject EMPIRICAL RESEARCH
dc.subject EMPIRICAL STUDIES
dc.subject EQUILIBRIUM
dc.subject EXPECTED UTILITY
dc.subject GENDER
dc.subject IMPERFECT INFORMATION
dc.subject INCOME
dc.subject INHERITANCE
dc.subject INSURANCE
dc.subject INTERGENERATIONAL TRANSFERS
dc.subject LOW INCOME
dc.subject MACROECONOMICS
dc.subject MARGINAL COST
dc.subject MARGINAL UTILITY
dc.subject MORAL HAZARD
dc.subject MULTIPLIERS
dc.subject PARTIAL INSURANCE
dc.subject POLICY RESEARCH
dc.subject POLITICAL ECONOMY
dc.subject POOR
dc.subject PRIVATE TRANSFERS
dc.subject RESOURCE ALLOCATION
dc.subject UTILITY FUNCTION
dc.title Family Altruism and Incentives en
dspace.entity.type Publication
okr.date.disclosure 2000-12-30
okr.doctype Publications & Research :: Policy Research Working Paper
okr.doctype Publications & Research
okr.docurl http://documents.worldbank.org/curated/en/2000/12/828301/family-altruism-incentives
okr.globalpractice Education
okr.globalpractice Social Protection and Labor
okr.identifier.doi 10.1596/1813-9450-2505
okr.identifier.externaldocumentum 000094946_01010505362751
okr.identifier.internaldocumentum 828301
okr.identifier.report WPS2505
okr.language.supported en
okr.pdfurl http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2001/01/20/000094946_01010505362751/Rendered/PDF/multi_page.pdf en
okr.theme Economic management :: Macroeconomic management
okr.topic Social Protections and Labor :: Safety Nets and Transfers
okr.topic Economic Theory and Research
okr.topic Education :: Educational Sciences
okr.topic Environmental Economics and Policies
okr.topic Health Economics and Finance
okr.unit Macroeconomics and Growth, Development Research Group
okr.volume 1
relation.isAuthorOfPublication 80e2e087-17b5-5934-9ff6-34ceb2ef6223
relation.isSeriesOfPublication 26e071dc-b0bf-409c-b982-df2970295c87
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