nep-dem New Economics Papers
on Demographic Economics
Issue of 2013‒09‒13
23 papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. Trends in teenage childbearing and schooling outcomes for children born to teens in South Africa By Nicola Branson; Cally Ardington; Murray Leibbrandt
  2. Effects of Early Childhood Intervention on Maternal Employment, Fertility and Well-Being. Evidence from a Randomized Controlled Trail By Sandner, Malte
  3. Fair Retirement Under Risky Lifetime By Marc Fleurbaey; Marie-Louise Leroux; Pierre Pestieau; Grégory Ponthière
  4. Labour Force Participation of Mature Age Men in Australia: The Role of Spousal Participation By Mavromaras, Kostas G.; Zhu, Rong
  5. Childcare and Commitment within Households By Paula GOBBI
  6. Parental benefits improve parental well-being: evidence from a 2007 policy change in Germany By Mikko Myrskylä; Rachel Margolis
  7. Empowering women through employment, earnings and wealth in India By Aparna Mathur; Sita Nataraj Slavov
  8. Unmet Aspirations as an Explanation for the Age U-Shape in Human Wellbeing By Hannes Schwandt
  9. Segregated integration : recent trends in the Austrian gender division of labor By Margareta Kreimer; Ricardo Mora
  10. Health-Related Life Cycle Risks and Public Insurance By Daniel Kemptner
  11. Preferences and biases in educational choices and labor market expectations: shrinking the black box of gender By Ernesto Reuben; Matthew Wiswall; Basit Zafar
  12. Social protection and labour market outcomes of youth in South Africa By Cally Ardington; Till Bärnighausen; Anne Case; Alicia Menendez
  13. Financial freedom experience of Indian Male and Female Executives By Raval, Vishvesh; Vyas, Khyati
  14. Alleinerziehende Mütter im Bereich des SGB II : eine Synopse empirischer Befunde aus der IAB-Forschung By Achatz, Juliane; Hirseland, Andreas; Lietzmann, Torsten; Zabel, Cordula
  15. Does Placing Children in Foster Care Increase Their Adult Criminality? By Lindquist, Matthew J.; Santavirta, Torsten
  16. Changes in education, employment and earnings in South Africa – A cohort analysis By Nicola Branson; Cally Ardington; David Lam; Murray Leibbrandt
  17. Moving out and moving in: Evidence of short-term household change in South Africa from the National Income Dynamics Study By Lloyd Grieger; April Williamson; Murray Leibbrandt; James Levinsohn
  18. The effect of young children on their parents’ anime viewing habits: Evidence from Japanese micro data By Yamamura, Eiji
  19. Inequality-Adjusted Gender Wage Differentials in Germany By Ekaterina Selezneva; Philippe Van Kerm
  20. Improving Post-High School Outcomes for Transition-Age Students with Disabilities: An Evidence Review. By R. Brian Cobb; Stephen Lipscomb; Jennifer Wolgemuth; Theresa Schulte; Abigail Veliquette; Morgen Alwell; Keriu Batchelder; Robert Bernard; Paul Hernandez; Helen Holmquist-Johnson; Rebecca Orsi; Laura Sample McMeeking; Jun Wang; Andrea Welnberg
  21. What is unpaid female labour worth? Evidence from the Time Use Studies of Iran in 2008 and 2009 By Ghazi Tabatabaei, M.; Mehri, N.; Messkoub, M.
  22. Long-term care and lazy rotten kids By Cremer, Helmuth; Roeder, Kerstin
  23. Distance to cannabis-shops and age of onset of cannabis use By Palali, A.; Ours, J.C. van

  1. By: Nicola Branson (SALDRU, School of Economics, University of Cape Town); Cally Ardington (SALDRU, School of Economics, University of Cape TownAuthor-Email:); Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town)
    Abstract: Teenage childbearing is considered a social problem with costs to the teenage mother, her child and society at large. In South Africa, media attention suggests a contemporary crisis in teen childbearing; often linking this to a fear that the Child Support Grant incentivises motherhood among teens. Despite these assertions, there is little empirical research assessing the trends in teen childbearing over time in South Africa and the intergenerational consequences of teenage childbearing. This paper uses six nationally representative household surveys to show that, while teenage childbearing decreased between 1980 and 2008, it is not an uncommon event in South Africa. Around 25% of women gave birth before age 20 in 2008. Children born to teen mothers are found to have worse educational outcomes, with children of young teen mothers most at risk. Differences are found between population groups, with the association largest and increasing over time for coloureds and relatively small and stable for Africans. About half the association can be explained by relative levels of poverty and maternal education.
    Keywords: Teenage childbearing, South Africa, National household survey data
    JEL: I24 J13
    Date: 2013
  2. By: Sandner, Malte
    Abstract: This paper presents results from a randomized evaluation of a home visiting program for disadvantaged first-time mothers and their families implemented in three German federal states. I analysis the impact of the intervention on maternal employment, school attendance, child care use, fertility, life-satisfaction and well-being. Biannual telephone interviews with the participating mothers until the third birthday of the child give a rich data source to evaluate these outcomes. I find that the intervention increases fertility and maternal life-satisfaction and well-being, whereas the treatment does not affect maternal employment, school attendance and child care use. These results are in contrast to previous studies from the US where home visiting programs decreased fertility.
    Keywords: Early Childhood Intervention, Randomized Experiment, Fertility
    JEL: J13 J12 I21 H52
    Date: 2013–08
  3. By: Marc Fleurbaey (Princeton University - Princeton University); Marie-Louise Leroux (Université du Québec - Université du Québec - Université du Québec, CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique); Pierre Pestieau (CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales [EHESS] - Ecole des Ponts ParisTech - Ecole normale supérieure de Paris - ENS Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CEPR - Center for Economic Policy Research - CEPR); Grégory Ponthière (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales [EHESS] - Ecole des Ponts ParisTech - Ecole normale supérieure de Paris - ENS Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: A premature death unexpectedly brings a life and a career to their end, leading to substantial welfare losses. We study the retirement decision in an economy with risky lifetime, and compare the laissez-faire with egalitarian social optima. We consider two social objectives: (1) the maximin on expected lifetime welfare (ex ante), allowing for a compensation for unequal life expectancies; (2) the maximin on realized lifetime welfare (ex post), allowing for a compensation for unequal lifetimes. The latter optimum involves, in general, decreasing lifetime consumption profiles, as well as raising the retirement age, unlike the ex ante egalitarian optimum. This result is robust to the introduction of unequal life expectancies and unequal productivities. Hence, the postponement of the retirement age can, quite surprisingly, be defended on egalitarian grounds --although the conclusion is reversed when mortality strikes only after retirement.
    Keywords: Risky lifetime ; Mortality ; Labour supply ; Retirement ; Compensation
    Date: 2013–09
  4. By: Mavromaras, Kostas G. (NILS, Flinders University); Zhu, Rong (NILS, Flinders University)
    Abstract: In this paper we estimate the interdependence of labour force participation decisions made by Australian couples from 2001 to 2011. We focus on couples with a mature age husband, and estimate the interdependence of the participation decision of the couple. We find that the decision of a wife to work or not influences positively, and in a causal fashion, the decision of her husband to work or not. In our paper we use counterfactual analysis to estimate the impact of the increasing labour force participation of a wife on her husband's participation. We find that the increased labour force participation of married women observed between 2002 and 2011 has been responsible for about a 4 percentage points increase in the participation of their mature age husbands.
    Keywords: labour force participation, spousal status, joint decision making, male employment trends, Australia
    JEL: J14 J21
    Date: 2013–08
  5. By: Paula GOBBI (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: Parental time with children increases with the education of both the mother and the father. As the education of parents increases, the gap between childcare supplied by mothers relative to that supplied by fathers decreases. A two steps semi-cooperative marital decision model is proposed to explain these two facts. First, parents collectively choose the amount of labor to supply and, in a second step, each of them chooses the amount of childcare as the outcome of a Cournot game. This framework gives rise to indeterminacy of the equilibrium and four selection criteria are proposed: one of a machist society, one of a feminist society, one of a random equilibrium and a last one that estimates the degree of social gender bias towards men. The semi-cooperative theoretical frameworks with the random selection criterion and the criterion that estimates the bias towards men provide the best match with the data.
    Keywords: Childcare, Education, Commitment, Semi-Cooperative Model
    JEL: J11 J13 J16 O11
    Date: 2013–09–02
  6. By: Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany); Rachel Margolis
    Abstract: Family policies aim to influence fertility and labor force participation, and support families. However, often only fertility and labor supply are considered in policy evaluations. For example, the 2007 extension of parental leave benefits in Germany is generally considered unsuccessful because changes in fertility and labor force participation were modest. However, parental wellbeing is also important, in itself and as a determinant of child well-being. This paper is the first to consider the effect of parental leave policies on parental well-being. We analyze the German 2007 parental benefits reform and find that the extension of benefits strongly increased parental well-being around the birth of a child. The effect is observed for first and second births and for various sub-populations. A placebo test using data from Britain where there was no policy change supports the causal interpretation. Our results cast the success of the German 2007 policy change in new light. Parental leave benefits have an important direct impact on parental wellbeing.
    Keywords: Germany, parenthood
    JEL: J1 Z0
    Date: 2013–08
  7. By: Aparna Mathur (American Enterprise Institute); Sita Nataraj Slavov (American Enterprise Institute)
    Abstract: Using data from two detailed, nationally representative, household datasets, we explore whether women who are economically empowered are less likely to experience domestic violence. We find that, while working women may be at a greater risk of violence, higher earnings are associated with a reduction in violence.
    Keywords: women's employment,India,domestic violence
    JEL: A F
    Date: 2013–08
  8. By: Hannes Schwandt
    Abstract: A large literature in behavioral and social sciences has found that human wellbeing follows a U-shape over age. Some theories have assumed that the U-shape is caused by unmet expectations that are felt painfully in midlife but beneficially abandoned and experienced with less regret during old age. In a unique panel of 132,609 life satisfaction expectations matched to subsequent realizations, I find people to err systematically in predicting their life satisfaction over the life cycle. They expect -- incorrectly -- increases in young adulthood and decreases during old age. These errors are large, ranging from 9.8% at age 21 to -4.5% at age 68, they are stable over time and observed across socio-economic groups. These findings support theories that unmet expectations drive the age U-shape in wellbeing.
    Keywords: Life satisfaction, expectations, aging
    JEL: A12 I30 D84
    Date: 2013
  9. By: Margareta Kreimer; Ricardo Mora
    Abstract: Using micro data from the Austrian Labor Force Survey, this paper explores how decreases in the gender differential in participation rates together with increasing differentials in the incidence of part-time jobs and stable or rising levels of occupational segregation by gender affect the gender division of labor. To so so, we propose an index for the gender division of labor based on the Mutual Information index. Our main results show that the gender division of labor is very stable along the 16-year period. This is so because although the rising female labor force participation reduces the gender division of labor, increases in gender differences in the incidence of part-time jobs and increases in occupational segregation result in greater division of labor across genders. These results are robust to alternative definitions of economic activity and labor market involvement and can also be found after controlling for educational levels and fields.
    Keywords: Gender segregation, Female labor force participation, Part-time jobs
    Date: 2013–09
  10. By: Daniel Kemptner
    Abstract: This paper proposes a dynamic life cycle model of health risks, employment, early retirement, and wealth accumulation in order to analyze the health-related risks of consumption and old age poverty. In particular, the model includes a health process, the interaction between health and employment risks, and an explicit modeling of the German public insurance schemes. I rely on a dynamic programming discrete choice framework and estimate the model using data from the German Socio-Economic Panel. I quantify the health-related life cycle risks by simulating scenarios where health shocks do or do not occur at different points in the life cycle for individuals with differing endowments. Moreover, a policy simulation investigates minimum pension benefits as an insurance against old age poverty. While such a reform raises a concern about an increase in abuse of the early retirement option, the simulations indicate that a means test mitigates<br /> the moral hazard problem substantially.
    Keywords: dynamic programming, discrete choice, health, employment, early retirement, consumption, tax and transfer system
    JEL: C61 I14 J22 J26
    Date: 2013
  11. By: Ernesto Reuben; Matthew Wiswall; Basit Zafar
    Abstract: Standard observed characteristics explain only part of the differences between men and women in education choices and labor market trajectories. Using an experiment to derive students' levels of overconfidence, and preferences for competitiveness and risk, this paper investigates whether these behavioral biases and preferences explain gender differences in college major choices and expected future earnings. In a sample of high-ability undergraduates, we find that competitiveness and overconfidence, but not risk aversion, are systematically related with expectations about future earnings: Individuals who are overconfident and overly competitive have significantly higher earnings expectations. Moreover, gender differences in overconfidence and competitiveness explain about 18 percent of the gender gap in earnings expectations. These experimental measures explain as much of the gender gap in earnings expectations as a rich set of control variables, including test scores and family background, and they are poorly proxied by these same control variables, underscoring that they represent independent variation. While expected earnings are related to college major choices, the experimental measures are not related with college major choice.
    Keywords: Career development - Sex differences ; Women - Education ; Universities and colleges ; Risk-taking (Psychology) ; Prediction (Psychology) ; Competition
    Date: 2013
  12. By: Cally Ardington (SALDRU, School of Economics, University of Cape TownAuthor-Email:); Till Bärnighausen (Africa Centre for Health and Population Studies and Harvard School of Public Health); Anne Case (Princeton University); Alicia Menendez (University of Chicago)
    Abstract: An Apartheid-driven spatial mismatch between workers and jobs leads to high job search costs for people living in rural areas of South Africa—costs that many young people cannot pay. In this paper, we examine whether the arrival of a social grant – specifically a generous state old age pension given to men and women above prime age – enhances the ability of young men in rural areas to seek better work opportunities elsewhere. Using 8 waves of socioeconomic data on household living arrangements and members' characteristics and employment status, collected between 2001 and 2011 at a demographic surveillance site in KwaZulu-Natal, we find that young men are significantly more likely to become labor migrants when someone in their household becomes age-eligible for the old-age pension. More specifically, we find that pension gain is a significant force, encouraging migration for work, but only among those who have successfully completed high school (matric). On average, relative to other potential labor migrants, young men with a matric are 8 percentage points more likely to migrate for work when their households become pension eligible. Among young men who were observed as labor migrants, we find that, upon pension loss, it is the youngest men who are the most likely to return to their sending households, perhaps because they are the least likely to be self-sufficient at the point the pension is lost. We present evidence consistent with binding credit constraints limiting young men from poorer households from seeking more lucrative work elsewhere.
    Date: 2013
  13. By: Raval, Vishvesh; Vyas, Khyati
    Abstract: Financial freedom is generally understood as state to do anything whenever you want. Financial well being brings lot of direct benefits like mental peace and capability to help others financially. Gender equality is new development of last few decades and one sees women in various roles, including females developing wealth for themselves. Every individual is different. We observe behavioral differences on Gender basis. Financial freedom experience of female Executives is very important to study against traditional male Executives. We decided that an attempt should be made to examine how financial freedom experience is different for male Executives and female Executives. Sample of 60 was selected comprising of 30 male participants and 30 female participants. All Executives were at least 18 years of age. Participants pursued different types of employment largely falling in production and trade on full time basis. Executives belonged to Vapi, Navsari, Vadodara and Ahmedabad. It was observed that Executives score do not show significant difference on Gender basis
    Keywords: Behavioural Finance, Psychology
    JEL: D1 D14 D31 D70 D80 E20 H30 I0 J0 P36 R2 R20
    Date: 2013–09–03
  14. By: Achatz, Juliane (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Hirseland, Andreas (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Lietzmann, Torsten (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Zabel, Cordula (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "From a social policy perspective, single parents - for the most part single mothers - are an important target group. Being solely in charge of both providing for the family's livelihood as well as parental care, the extent to which they can be gainfully employed is often restricted. Their financial situation is often precarious, which is reflected by a four times higher welfare benefit rate of single parent households compared to average households. Based on recent research, the report at hand examines employment and living conditions of single mothers, in particular of recipients of unemployment benefit II (Arbeitslosengeld II). Focusing on this group of single mothers receiving basic income support for needy jobseekers, their labor market participation, work motivation as well as factors associated with the duration of benefit receipt is of paramount interest. Overall results indicate a high labor market orientation of single mothers. Compared to partnered mothers dependent on welfare, single mothers more frequently seek for a job and take up employment. Being employed is an essential aspect of their per-sonal conception of life. Due to various factors though, like a shortage of childcare services, limited demand for labor, or a need to stabilize the family's living conditions, occupational aspirations often cannot be realized. Single mothers most frequently take up marginal jobs, which rarely - even less so compared to partnered mothers - enable them to exit welfare. Besides occupational qualification and experience, the number and age of children significantly impact employment prospects. Adequate childcare services, support of labor market integration as well as family-compatible working conditions are important prerequisites for taking up work, increasing working hours as well as participating in active labor market programs." (Author's abstract, IAB-Doku) ((en))
    Date: 2013–09–02
  15. By: Lindquist, Matthew J. (Swedish Institute for Social Research, Stockholm University); Santavirta, Torsten (Swedish Institute for Social Research, Stockholm University)
    Abstract: -
    Keywords: -
    Date: 2013–08–19
  16. By: Nicola Branson (SALDRU, School of Economics, University of Cape Town); Cally Ardington (SALDRU, School of Economics, University of Cape TownAuthor-Email:); David Lam (; Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town)
    Abstract: Rapid increases in educational attainment and the massification of secondary education in South Africa resulted in substantial differences in the supply and quality of educated workers across generations. This paper describes changes in the distribution of education across birth cohorts and how these relate to changes in the probability of employment, the distribution of earnings and the earnings premiums to complete secondary and tertiary education. Tracking cohorts over time allows us to disentangle generational and life-cycle components of these changes. Younger cohorts are shown to have increasingly faced worse labour market conditions than their predecessors, although this may be changing for cohorts born after 1980. Furthermore, the relative reward to complete secondary and tertiary education has remained positive, and increased for tertiary educated cohorts born since the 1960s. Increases in earnings inequality among those with complete secondary education suggests increased variance in education quality during the period when completed secondary education expanded rapidly.
    Keywords: Educational attainment, Earnings, Employment, South Africa, Cohort analysis
    JEL: I25 I24 J24
    Date: 2013
  17. By: Lloyd Grieger (Center for Research on Inequalities and the Life Course, Jackson Institute for Global Affairs, Yale University); April Williamson (Jackson Institute for Global Affairs, Yale University); Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town); James Levinsohn (Yale School of Management, Jackson Institute for Global Aff airs, Yale University)
    Abstract: We use longitudinal data from the National Income Dynamics Study (NIDS) to document the extent of recent short-term residential and household compositional change in South Africa. We analyze the demographic correlates of these transitions, including population group, age, urban/rural status, and income. We examine educational and labour market transitions among movers and the prevalence of the four major types of compositional change – births, addition of joiners, deaths, and loss of leavers. We find that short-term household change is prevalent in South Africa. During a 2-year period from 2008 to 2010, 10.5% of South Africans moved residence and 61.3% experienced change in household composition. We find that moving is more common among blacks and whites, very young children, young adults, urban individuals, and those with higher incomes. Among non-movers, compositional change is more likely for blacks and coloureds, young adults and children, females, urban individuals, and individuals with lower incomes.
    Keywords: household change; residential dynamics; moving; National Income Dynamics Study
    Date: 2013
  18. By: Yamamura, Eiji
    Abstract: Anime is now considered an accepted form of animation and is considered to represent Japanese contemporary culture worldwide. There are many fans of anime and manga, creating a community known as otaku world. However, Japanese anime and manga have gained popularity in Western countries as well as in Japan. This paper attempts to ascertain the determinants of watching anime in Japan based on individual-level data from Japan. Despite the growth in the number of adult anime fans, children are still more likely to watch anime than adults are. Hence, this study investigates how adults are influenced by the presence of their children. After controlling for individual characteristics, it was found that people are more likely to watch anime when they have children aged less than 12 years who have not yet entered junior high school. Such an effect is larger for parents who belong to an older generation where people are less likely to prefer anime. This implies that the externality coming from children results in parents watching anime. The findings of this study show that externalities from surrounding people play a critical role in enlarging the market of modern cultural goods representing “Cool Japan”.
    Keywords: Anime; Japan; Externality; Contemporary culture; Otaku; Cool Japan.
    JEL: D12 Z11 Z19
    Date: 2013–08–20
  19. By: Ekaterina Selezneva; Philippe Van Kerm
    Abstract: This paper exploits data from the German Socio-Economic Panel (SOEP) to re-examine the gender wage gap in Germany on the basis of inequality-adjusted measures of wage differentials which fully account for gender differences in pay distributions. The inequality-adjusted gender pay gap measures are significantly larger than suggested by standard indicators, especially in East Germany. Women appear penalized twice, with both lower mean wages and greater wage inequality. A hypothetical risky investment question collected in 2004 in the SOEP is used to estimate individual risk aversion parameters and benchmark the ranges of inequality-adjusted wage differentials measures.
    Keywords: Gender gap, wage differentials, wage inequality, expected utility, risk aversion, East and West Germany, SOEP, Singh-Maddala distribution, copula-based selection model
    JEL: D63 J31 J70
    Date: 2013
  20. By: R. Brian Cobb; Stephen Lipscomb; Jennifer Wolgemuth; Theresa Schulte; Abigail Veliquette; Morgen Alwell; Keriu Batchelder; Robert Bernard; Paul Hernandez; Helen Holmquist-Johnson; Rebecca Orsi; Laura Sample McMeeking; Jun Wang; Andrea Welnberg
    Keywords: Students with disabilities, secondary transition, post-high school outcomes, evidence review
    JEL: I J I
    Date: 2013–08–30
  21. By: Ghazi Tabatabaei, M.; Mehri, N.; Messkoub, M.
    Abstract: This paper uses the Time Use Survey of Iran of 2008 and 2009 to estimate the monetary value of unpaid domestic work of urban housewives. The surveys recorded domestic work activities such as cooking and cleaning and general care of household members as well as care of children and their education. Using the market-based approach to estimate the monetary value of unpaid domestic work we collected data on the cost of buying in services for domestic work and for education of children from ‘nursing agencies’ and private education colleges in main cities of Iran in the summer of 2011 that were adjusted to obtain the 2008 and 2009 prices.The market value of domestic work of urban housewives was estimated to be US$25 billion in 2008 and US$29 billion in 2009. These were about 8.6 per cent of non-oil GDP in the same years. Our estimates complement other findings from around the world that confirm substantial contribution of housewives to the economy. These contributions have gone unrecorded and not compensated in most countries. At a minimum, housewives can be insured against basic contingencies of life such has health problems, poverty and disabilities and supported in old age. Our work and other studies do provide the economic and social arguments for costing and putting into practice the long overdue support for housewives; they have earned it!
    Keywords: economic evaluation;Iran;social insurance;care economy;domestic unpaid work;feminism and gender studies;generations and regeneration;production and reproduction;time-use
    Date: 2013–08–29
  22. By: Cremer, Helmuth (IDEI,TSE); Roeder, Kerstin
    Abstract: This paper studies the determination of informal long-term care (family aid) to de- pendent elderly in a worst case scenario concerning the harmonyof family relations. Children are purely sel…sh, and neither side can make credible commitments (which rules out e¢ cient bargaining). The model is based on Beckers rotten kid speci…ca- tion except that it explicitly accounts for the sequence of decisions. In Beckers world, with a single good, this setting yields e¢ ciency. We show that when family aid (and long-term care services in general) are introduced the outcome is likely to be ine¢ cient. Still, the rotten kid mechanism is at work and ensures that a positive level of aid is provided as long as the bequest motive is operative. We identify the ine¢ ciencies by comparing the laissez-faire (subgame perfect) equilibrium to the …rst-best allocation. We initially assume that families are identical ex ante. However, the case where dyn- asties di¤er in wealth is also considered. We study how the provision of long-term care (LTC) can be improved by public policies under various informational assumptions. In- terestingly, crowding out of private aid by public LTC is not a problem in this setting. With an operative bequest motive, public LTC will have no impact on private aid. More amazingly still, when the bequest motive is (initially) not operative, public insurance may even enhance the provision of informal aid.
    Keywords: Rotten kids, long-term care, family aid, optimal taxation
    Date: 2013–08
  23. By: Palali, A.; Ours, J.C. van (Tilburg University, Center for Economic Research)
    Abstract: Abstract: In the Netherlands cannabis use is quasi-legalized. Small quantities of cannabis can be bought in cannabis-shops. We investigate how the distance to the nearest cannabis- shop affects the age of onset of cannabis use. We use a Mixed Proportional Hazard rate framework to take account of observable as well as unobservable characteristics that in uence the uptake of cannabis. We find that distance matters. Individuals who grow up within 20 kilometers of a cannabis-shop have a lower age of onset.
    Keywords: cannabis use;coffeeshops;drugs policy.
    JEL: C31 I10 I18
    Date: 2013

This nep-dem issue is ©2013 by Clarence Nkengne Tsimpo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.