May 2009

IZA DP No. 4179: Optimal Family Policy in the Presence of Moral Hazard, When the Quantity and Quality of Children Are Stochastic

Alessandro Cigno, Annalisa Luporini

published in:CESifo Economic Studies, 2011, 57 (2), 349-364

我们检查下的第二家庭政策assumption that both the number and the future earning capacities of the children born to a couple are random variables with probability distributions conditional on unobservable parental actions. Potential parents take their decisions without taking into account the effects of these actions on the government's future tax revenue. The second-best policy provides parents with credit and insurance, and allows them to appropriate the external benefits of their actions.