Optimal contracting with dynastic altruism: Family size and per capita consumption

• 成果类型: Article
• 署名作者: Hosseini, Roozbeh; Jones, Larry E.; Shourideh, Ali
• 署名单位: Arizona State University; Arizona State University-Tempe; University of Minnesota System; University of Minnesota Twin Cities; University of Pennsylvania
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2013.04.022
• 发表日期: 2013
• 页码: 1806-1840
• 关键词: private information; risk sharing; Long run inequality; endogenous fertility; altruism

摘要

We use a Barro-Becker model of endogenous fertility, in which parents are subject to idiosyncratic shocks that are private information (either to labor productivity or taste for leisure), to study the efficient degree of consumption inequality in the long run. The planner uses the trade-off between family size and future consumption and leisure, to provide incentives for workers to reveal their shocks. We show that in this environment, the optimal dynamic contract no longer features immiseration in consumption. We also discuss the implications of the model on the long run properties of family size in the optimal contract and show that the long run trend in dynasty size can be either positive or negative depending on parameters. (C) 2013 Elsevier Inc. All rights reserved.