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Income Transfers, Welfare and Family Decisions

Author

Listed:
  • Andaluz, Joaquín

    (University of Zaragoza)

  • Marcén, Miriam

    (University of Zaragoza)

  • Molina, José Alberto

    (University of Zaragoza)

Abstract

This paper studies the effects of different income transfers on individual welfare, in both marriage and divorce situations, and on family decisions. We assume three generations within the family. We develop a sequential game that, in a first stage, determines the optimum level of the transfer within a relationship of one-sided altruism. In the second stage, the level of welfare is deduced by way of a Nash bargaining solution. We show that inter-generational transfers may produce losses derived from the marriage. We have also found that the donor of an intergenerational transfer can behave in a compensatory way in an altruism model.

Suggested Citation

  • Andaluz, Joaquín & Marcén, Miriam & Molina, José Alberto, 2007. "Income Transfers, Welfare and Family Decisions," IZA Discussion Papers 2804, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2804
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    References listed on IDEAS

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    More about this item

    Keywords

    income transfers; welfare; marriage; Nash-bargaining; family decisions;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D10 - Microeconomics - - Household Behavior - - - General
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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