Working Paper: CEPR ID: DP2796
Authors: Christian Dustmann; John Micklewright
Abstract: We analyse the labour supply of 16-year-old British children together with the cash transfers made to them by their parents. We develop a theoretical model with an altruistic parent and a selfish child, which serves as a basis for the empirical specification in which labour supply and transfers are jointly determined. We show how parental transfers and the child?s labour supply are dependent on each other. Consideration of this is important when assessing the influence of other factors.
Keywords: child labour; supply; intrahousehold transfers
JEL Codes: C35; C70; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increased parental cash transfers (J13) | Reduction in child's willingness to work (J22) |
| Increased hours worked by child (J22) | Reduction in parental transfers (D15) |
| Parental income (D31) | Increased parental transfers (D15) |
| Increased parental transfers (D15) | Indirect reduction in labour force participation (J29) |
| Parental education (I24) | Reduction in parental transfers (D15) |
| Parental education (I24) | Reduction in child's labour supply (J22) |