nep-neu New Economics Papers
on Neuroeconomics
Issue of 2019‒02‒18
two papers chosen by

  1. Actors in the Child Development Process By Daniela Del Boca; Christopher Flinn; Ewout Verriest; Matthew Wiswall

  1. By: Daniela Del Boca (University of Turin and Collegio Carlo Alberto); Christopher Flinn (New York University); Ewout Verriest (New York University); Matthew Wiswall (Arizona State University)
    Abstract: We construct and estimate a model of child development in which both the parents and children make investments in the child’s skill development. In each period of the development process, partially altruistic parents act as the Stackelberg leader and the child the follower when setting her own study time. We then extend this non-cooperative form of interaction by allowing parents to offer incentives to the child to increase her study time, at some monitoring cost. We show that this incentive scheme, a kind of internal conditional cash transfer, produces efficient outcomes and, in general, increases the child’s cognitive ability. In addition to heterogeneity in resources (wage offers and non-labor income), the model allows for heterogeneity in preferences both for parents and children, and in monitoring costs. Like their parents, children are forward-looking, but we allow children and parents to have different preferences and for children to have age-varying discount rates, becoming more “patient” as they age. Using detailed time diary information on the allocation of parent and child time linked to measures of child cognitive ability, we estimate several versions of the model. Using model estimates, we explore the impact of various government income transfer policies on child development. As in Del Boca et al. (2016), we find that the most effective set of policies are (external) conditional cash transfers, in which the household receives an income transfer given that the child’s cognitive ability exceeds a prespecified threshold. We find that the possibility of households using internal conditional cash transfers greatly increases the cost effectiveness of external conditional cash transfer policies.
    Keywords: Time Allocation, Child Development, household labor supply
    JEL: J13 D10
    Date: 2019–02
  2. By: Zubair, Maria; Khanum, Ayesha; Nasir, Marjan
    Abstract: It is commonly believed that parents transfer their behavioral traits to their offspring. But where does one draw the line between nature and nurture? Most of us have received our first lessons in lying, trust, generosity and even selfishness from our parents. These non-cognitive skills, like patience, ambition, tenacity etc. are all thus malleable traits if we come to prove that they are transferred from parent to their child. A field experiment was conducted at a private school in Lahore, Pakistan. These experiments measured two key non-cognitive skills that literature believes are passed onto the offspring via their parents: patience and trust. To measure the correlation between parents and children, an ordered probit analysis was employed. Our findings show that there is a strong negative relationship between child’s patience to that of her parent. Child and parent trust display no significant relationship. However, a positive significant relationship was analyzed between child reciprocity and parent reciprocity.
    Keywords: behavioral games, trust, patience, intergenerational transfers
    JEL: D19
    Date: 2018–10–02

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.