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Income insecurity and youth emancipation : a theoretical approach
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Fernandes, Ana, Becker, Sascha O., Bentolila, Samuel and Ichino, Andrea (2008) Income insecurity and youth emancipation : a theoretical approach. The BE Journal of Economic Analysis & Policy, Vol.8 (No.1). Article no. 19. doi:10.2202/1935-1682.1783
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Official URL: http://dx.doi.org/10.2202/1935-1682.1783
Abstract
In this paper, we propose a theoretical model to study the effect of income insecurity of parents and offspring on the child's residential choice. Parents are partially altruistic toward their children and will provide financial help to an independent child when her income is low relative to the parents'. We find that children of more altruistic parents are more likely to become independent. However, first-order stochastic dominance (FOSD) shifts in the distribution of the child's future income (or her parents') have ambiguous effects on the child's residential choice. Parental altruism is the very source of ambiguity in the results. If parents are selfish or the joint income distribution of parents and child places no mass on the region where transfers are provided, a FOSD shift in the distribution of the child's (parents') future income will reduce (raise) the child's current income threshold for independence.
| Item Type: | Journal Article | ||||
|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HB Economic Theory | ||||
| Divisions: | Faculty of Social Sciences > Economics | ||||
| Journal or Publication Title: | The BE Journal of Economic Analysis & Policy | ||||
| Publisher: | Walter de Gruyter GmbH & Co. KG | ||||
| ISSN: | 1935-1682 | ||||
| Official Date: | January 2008 | ||||
| Dates: |
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| Volume: | Vol.8 | ||||
| Number: | No.1 | ||||
| Page Range: | Article no. 19 | ||||
| DOI: | 10.2202/1935-1682.1783 | ||||
| Status: | Peer Reviewed | ||||
| Publication Status: | Published | ||||
| Access rights to Published version: | Restricted or Subscription Access | ||||
| Funder: | European Commission TSER Project | ||||
| Grant number: | ERB4142 PL97/3148 |
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