A Theory of Educational Inequality Family and Agency Costs

In this paper, we examine the consequences of imperfect information on the pattern of transfers from parents to children. Drawing on the theory of mechanism design, we consider a model of family contract with two levels of effort. We prove that equal transfers among children are expected under perfect information, while the second-best contract implies risksharing between the two generations, so that poor families experience higher agency costs..

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Year of publication:	2009-09-21
Authors:	Jellal, Mohamed
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	Education \| Asymmetric Information \| Family Financial Incentives \| Inequality

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Classification:	D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; J1 - Demographic Economics ; D82 - Asymmetric and Private Information ; A2 - Economics Education and Teaching of Economics ; D1 - Household Behavior and Family Economics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008528726