Optimal Policy Towards Families with Different Amounts of Social Capital, in the Presence of Asymmetric Information and Stochastic Fertility

Alessandro Cigno and Annalisa Luporini (luporini@unifi.it)

No 1664, CESifo Working Paper Series from CESifo

Abstract: We examine the effects of differences in social capital on first and second best transfers to families with children, in an asymmetric information context where the number of births, and the future earning capacity of each child that is born, are random variables. The probability that a couple has children is conditional on the level of reproductive activity undertaken. The probability that a child will have high earning ability is positively conditioned not only by the level of educational investment undertaken by the child’s parents, but also by the social capital of the latter. The optimal policy includes two transfers, one conditional on number of births, the other on the children’s earning ability.

Keywords: education; stochastic fertility; child benefits; pensions; scholarships; social capital; asymmetric information; multi-agency (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-pbe and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Working Paper: Optimal Policy Towards Families with Di¤erent Amounts of Social Capital, in the Presence of Asymmetric Information and Stochastic Fertility (2006)
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