A theory of family education incentives and inequality

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 risk-sharing between the two generations, so that poor families experience higher agency costs, therefore inequality persists.

Keywords: Asymmetric information; Family; Education; Incentives; Transfers; Inequality. (search for similar items in EconPapers)
JEL-codes: D82 D86 I21 I22 I24 J1 J13 (search for similar items in EconPapers)
Date: 2014-08-14
New Economics Papers: this item is included in nep-cta and nep-edu
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:57913

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