Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/145174
Authors: 
Holford, Angus J.
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 10040
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: 
intra-household transfers
pocket money
child labour supply
noncooperative game
human capital
JEL: 
C52
C72
D13
J22
Document Type: 
Working Paper

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