Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/30650 
Year of Publication: 
2009
Series/Report no.: 
CESifo Working Paper No. 2664
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
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 also in the sense of Principal-Agent theory if the parental action of concern to the government is private information. This throws doubt on some established optimal-taxation results, and gives rise to some new ones.
Subjects: 
optimal taxation
optimal family allowances
hidden ability to raise children
hidden educational investments
endogenous and exogenous fertility
JEL: 
D13
D82
H24
H31
J13
J24
Document Type: 
Working Paper
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