Optimal Family Policy in the Presence of Moral Hazard, When the Quantity and Quality of Children Are Stochastic

Alessandro Cigno and Annalisa Luporini ()

No 4179, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We examine the second-best family policy under the assumption that both the number and the future earning capacities of the children born to a couple are random variables with probability distributions conditional on unobservable parental actions. Potential parents take their decisions without taking into account the effects of these actions on the government's future tax revenue. The second-best policy provides parents with credit and insurance, and allows them to appropriate the external benefits of their actions.

Keywords: scholarships; stochastic quantity and quality of children; population externalities; moral hazard; pensions; family allowances (search for similar items in EconPapers)
JEL-codes: D13 D78 D82 H31 J13 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2009-05
New Economics Papers: this item is included in nep-cta
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Citations: View citations in EconPapers (6)

Published - published in: CESifo Economic Studies , 2011, 57 (2), 349-364

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Related works:
Journal Article: Optimal Family Policy in the Presence of Moral Hazard when the Quantity and Quality of Children are Stochastic (2011)
Working Paper: Optimal family policy in the presence of moral hazard, when the quantity and quality of children are stochastic (2009)
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