The World Bank documents an inverse relationship between GDP per capita and child labor participation rates. We construct a life-cycle model with human and physical capital in which parents make a time allocation choice for their child. The model considers two features that have shown potential...

Momentary equilibria are defined as points that satisfy agents’ optimality conditions and market clearing at any date. However, some dynamic sequences commencing from such points may not be considered valid equilibria because they asymptotically violate some economic restriction of the...

Evidence supports the notion that those who grow up to be patient do better than those who do not. Parents can inculcate the virtue of delayed gratification in their children by taking the right actions. We study a model in which parents, for selfish reasons, invest resources to raise patient...

In the classic Meltzer and Richard (1981) model, the canonical model of income redistribution in democracies, voters, heterogeneous on the sole dimension of idiosyncratic productivity,evaluate an income redistributive program that pays everyone a lump-sum income subsidy financed by a distorting...

Evidence supports the notion that those who grow up to be patient do better than those who do not. Parents can inculcate the virtue of delayed gratification in their children by taking the right actions. We study a model in which parents, for selfish reasons, invest resources to raise patient...

We compare two institutions head on, a family compact – a parent makes a transfer to her parent in anticipation of a possible future gift from her children – with a pay-as-you-go, social security system in a lifecycle model with endogenous fertility wherein children are valued both as...