Publication type
ISER Working Paper Series
Series Number
2016-05
Series
ISER Working Paper Series
Author
Publication date
July 1, 2016
Abstract:
This paper models child employment and parental pocket money decisions as a non- cooperative game. Assuming that the child human capital is a household public good and that the relationship between child human capital and employment is concave, we compare the welfare obtained under different decision-making mechanisms and test the predictions of the model for a cohort of English teenagers in compulsory education. Our results support a situation in which parents ‘tax’ their children’s earnings, withdrawing financial support as the child increases his working hours. This strategy forces the child to internalise the social cost of his activities.
Subjects
Related Publications
-
Do parents tax their children? Teenage labour supply and financial support
Angus Holford,Research Paper - 20160715
#523764