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Parental Separation and the Formation of Economic Preferences

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  • Dahmann, Sarah C.

    (University of Melbourne)

  • Kettlewell, Nathan

    (University of Technology, Sydney)

  • Lam, Jack

    (University of Queensland)

Abstract

We estimate the effect of parental separation on the risk and trust attitudes of German adolescents using a large household survey dataset, which allows us to match respondents to their siblings and parents. Our results indicate that adolescents from separated families are less trusting but have the same risk tolerance as adolescents from non-separated families, even after conditioning on the attitudes of parents and other controls. This trust deficit persists into early adulthood. Moreover, for both trust and risk, we find that separation attenuates the transmission of preferences from father to child. Additional analyses point to reduced parental involvement and greater family conflict as potential mechanisms.

Suggested Citation

  • Dahmann, Sarah C. & Kettlewell, Nathan & Lam, Jack, 2022. "Parental Separation and the Formation of Economic Preferences," IZA Discussion Papers 14993, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14993
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    More about this item

    Keywords

    family dissolution; divorce; preferences; risk; trust; intergenerational transmission;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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