Given that young children are under the control of their parents, if the government has an interest in either the welfare or the productivity of the former, it has no option but to act through the latter. Parents are, in the ordinary sense of the word, the government’s agents. They are agents...

The paper analyses the effect of interest rate changes on education and child labor in an economy with a high-skilled sector, a low-skilled sector and fragmented credit markets. The high-skilled sector takes educated labor as input. The low-skilled sector takes unskilled labor, physical capital...

This paper studies how the risk of divorce affects the human capital decisions of a young couple. We consider a setting where complete specialization (one of the spouses uses up all the education resources) is optimal with no divorce risk. Symmetry in education (both spouses receive an equal...

Given that young children are under the control of their parents, if the government has an interest in either the welfare or the productivity of the former, it has no option but to act through the latter. Parents are, in the ordinary sense of the word, the government’s agents. They are agents...

This paper studies how the risk of divorce affects the human capital decisions of a young couple. We consider a setting where complete specialization (one of the spouses uses up all the education resources) is optimal with no divorce risk. Symmetry in education (both spouses receive an equal...

When social security is established to provide pensions to parents, their reliance upon children for future financial support decreases; and their need to save for retirement also falls. We use the expansion of pension coverage from the state sector to the non-state sector in urban China as a...

This paper studies how the risk of divorce affects the human capital decisions of a young couple. We consider a setting where complete specialization (one of the spouses uses up all the education resources) is optimal with no divorce risk. Symmetry in education (both spouses receive an equal...

We consider a case where some of the parents have higher ability to raise children than others. First-best policy gives both types of parents the same level of utility. If parental actions are not fully observable, however, the policy maker has to take into account the incentive-compatibility...

When social security is established to provide pensions to parents, their reliance upon children for future financial support decreases; and their need to save for retirement also falls. We use the expansion of pension coverage from the state sector to the non-state sector in urban China as a...

This paper develops a novel model of marital sorting on income potentials: In the marriage market, people are matching on potential wage growth rates which differ across individuals. Gains from marriage arise from intra-household specialization as couples make joint decisions on how much time to...