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Motives for pocket money allowance and family incentives

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  • Christine Barnet-Verzat

    (LEN - Laboratoire d'économie de Nantes - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes)

  • François-Charles Wolff

    (INED - Institut national d'études démographiques, LEN - Laboratoire d'économie de Nantes - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes)

Abstract

To explain motives underlying intergenerational transfers within the family, economists suggest three theoretical hypotheses: altruism, exchange and endogenous altruism due to preference shaping. In this paper we seek to identify family motives for private transfers in France, through the study of pocket money. Using a particularly rich survey carried out in 1992 about parental transfers to young children, our econometric analysis puts forward the heterogeneity of family motivations. The standard assumption according to which a single motive may be universally true is rejected by the data. At a disaggregated level, regular payments must be distinguished from irregular ones. The former fit in an intertemporal framework, the latter are nearer altruistic motives. But among them, buying of children's services and school rewards also exist.

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  • Christine Barnet-Verzat & François-Charles Wolff, 2002. "Motives for pocket money allowance and family incentives," Post-Print hal-03913051, HAL.
    • Handle: RePEc:hal:journl:hal-03913051
    DOI: 10.1016/S0167-4870(02)00080-6
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    1. Wolff, Francois-Charles & Laferrere, Anne, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 13, pages 889-969, Elsevier.
    2. Carlsson Hauff, Jeanette & Hermansson, Cecilia, 2023. "“Buy him some Tesla stocks for his baptism”: Gender differences among young savers," Working Paper Series 23/12, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance, revised 19 Sep 2024.
    3. Lin Zhang & Shinsuke Ikeda, 2016. "Welfare-enhancing parental altruism and children’s habit formation," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 63(3), pages 281-303, September.
    4. J. Michael Collins & Elizabeth Odders-White, 2021. "Allowances: Incidence in the US and Relationship to Financial Capability in Young Adulthood," Journal of Family and Economic Issues, Springer, vol. 42(3), pages 533-544, September.
    5. repec:ebl:ecbull:v:9:y:2008:i:13:p:1-10 is not listed on IDEAS
    6. Steier, Lloyd, 2003. "Variants of agency contracts in family-financed ventures as a continuum of familial altruistic and market rationalities," Journal of Business Venturing, Elsevier, vol. 18(5), pages 597-618, September.
    7. Viola Angelini & Anne Laferrère, 2013. "Parental altruism and nest leaving in Europe: evidence from a retrospective survey," Review of Economics of the Household, Springer, vol. 11(3), pages 393-420, September.
    8. Ben Lakhdar, Christian & Cauchie, Grégoire & Vaillant, Nicolas Gérard & Wolff, François-Charles, 2012. "The role of family incomes in cigarette smoking: Evidence from French students," Social Science & Medicine, Elsevier, vol. 74(12), pages 1864-1873.
    9. J. Michael Collins & Madelaine L’Esperance, 2023. "What do students gain from banks in schools? A field study," Review of Economics of the Household, Springer, vol. 21(2), pages 567-590, June.
    10. Lisa Farrell & Paul Frijters & Michael A. Shields, 2002. "The Economic Motives for Child Allowances: Altruism, Exchange or Value of Independence?," Discussion Papers Series 446, School of Economics, University of Queensland, Australia.
    11. Lu Ma & Zeping Fang & Liwang Gao & Yaling Zhao & Hong Xue & Ke Li & Youfa Wang, 2020. "A 3-year Longitudinal Study of Pocket Money, Eating Behavior, Weight Status: The Childhood Obesity Study in China Mega-Cities," IJERPH, MDPI, vol. 17(23), pages 1-13, December.
    12. François-Charles Wolff & Christine Barnet-Verzat, 2008. "Pocket money and child effort at school," Economics Bulletin, AccessEcon, vol. 9(13), pages 1-10.
    13. Steven Levitt & John List & Sally Sadoff, 2016. "The Effect of Performance-Based Incentives on Educational Achievement: Evidence from a Randomized Experiment," Framed Field Experiments 00585, The Field Experiments Website.
    14. Jellal, Mohamed, 2009. "A Theory of Educational Inequality Family and Agency Costs," MPRA Paper 17434, University Library of Munich, Germany.
    15. Clinton Gudmunson & Sharon Danes, 2011. "Family Financial Socialization: Theory and Critical Review," Journal of Family and Economic Issues, Springer, vol. 32(4), pages 644-667, December.
    16. Pierre-André Chiappori & Edoardo Ciscato & Carla Guerriero, 2021. "Analyzing Matching Patterns in Marriage:Theory and Application to Italian Data," CSEF Working Papers 613, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    17. Permani, Risti & Nuryartono, Nunung & Wardani, Fikria Ulfa & Anggraenie, Triana, 2015. "'Local Milk for Local Schools?': Children Dairy Consumption Behaviours, Willingness to Pay and Health in Indonesia," 2015 Conference (59th), February 10-13, 2015, Rotorua, New Zealand 202570, Australian Agricultural and Resource Economics Society.
    18. repec:ebl:ecbull:v:10:y:2003:i:1:p:1-7 is not listed on IDEAS
    19. Chau-kiu Cheung & Jerf Wai-keung Yeung, 2017. "Parental and Teachers’ Regard as Mediators of the Effect of Girls’ Delinquency on Hope," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 10(3), pages 839-858, September.
    20. Wolff François-Charles & Barnet-Verzat Christine, 2003. "Labor opportunities against family intergenerational exchange," Economics Bulletin, AccessEcon, vol. 10(1), pages 1-7.
    21. Brown, Sarah & Taylor, Karl, 2016. "Early influences on saving behaviour: Analysis of British panel data," Journal of Banking & Finance, Elsevier, vol. 62(C), pages 1-14.
    22. Otto, Annette, 2013. "Saving in childhood and adolescence: Insights from developmental psychology," Economics of Education Review, Elsevier, vol. 33(C), pages 8-18.
    23. Jellal, Mohamed, 2014. "A theory of family education incentives and inequality," MPRA Paper 57913, University Library of Munich, Germany.
    24. Cheung, Chau-kiu & Ngai, Ngan-pun, 2010. "Training to raise unemployed youth's work commitment in Tianjin," Children and Youth Services Review, Elsevier, vol. 32(2), pages 298-305, February.
    25. Sarah Brown & Karl Taylor, 2012. "Expectations and the Saving Behaviour of Children: Analysis of the U.S. Panel Study of Income Dynamics," Working Papers 2012015, The University of Sheffield, Department of Economics.

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