A Theory of Educational Inequality Family and Agency Costs

Mohamed Jellal ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we examine the consequences of imperfect information on the pattern of transfers from parents to children. Drawing on the theory of mechanism design, we consider a model of family contract with two levels of effort. We prove that equal transfers among children are expected under perfect information, while the second-best contract implies risksharing between the two generations, so that poor families experience higher agency costs..

Keywords: Education; Asymmetric Information; Family Financial Incentives; Inequality (search for similar items in EconPapers)
JEL-codes: A2 D1 D63 D82 J1 (search for similar items in EconPapers)
Date: 2009-09-21
New Economics Papers: this item is included in nep-cta
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:17434

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