Parental altruism under imperfect information: Theory and evidence

Can we reconcile the predictions of the altruism model of the family with the evidence on intervivos transfers in the US? This paper expands the altruism model by introducing e ?ort of the child and by relaxing the assumption of perfect information of the parent about the labor market opportunities of the child. First, I solve and simulate a model of altruism under imperfect information. Second, I use cross-sectional data to test a prediction of the model: Are parental transfers especially responsive to the income variations of children who are very attached to the labor market? The results suggest that imperfect information accounts for several patterns of intergenerational transfers in the US.Altruism, imperfect information, intervivos transfers

Compensating wage differentials and voluntary job changes: Evidence from West Germany

Does the labor market place wage premia on jobs that involve physical strain, job, insecurity or bad regulation of hours? This paper derives bounds on the monetary returns to these job disamenities in the West German labor market. We show that in a market with dispersion in both job characteristics and wages, the average wage change of workers who switch jobs voluntarily and opt for consuming more (less) disamenities,provides an upper (lower) bound on the market return to the disamenity. Using longitudinal information from workers in the German Socio Economic Panel, we estimate an upper bound of 5% and a lower bound of 3.5% for the market return to work strain in a job.Wage level and structure, job satisfaction, compensation packages

The marginal propensity to spend on adult children

We examine how much of an extra dollar of parental lifetime resources will ultimately be passed on to adult children in the form of inter vivos transfers and bequests. We infer bequests from the stock of wealth late in life. We use mortality rates and age specific estimates of the response of transfers and wealth to permanent income to compute the expected present discounted values of these responses to permanent income. Our estimates imply parents pass on between 2 and 3 cents out of an extra dollar of expected lifetime resources in bequests and about 2 cents in transfers. The estimates increase with parental income and are smaller for nonwhites. They imply that about 15 percent of the effect of parental income on lifetime resources of adult children is through transfers and bequests and about 85 percent is through the intergenerational correlation in earnings, although these estimates are sensitive to assumptions about the intergenerational earnings correlation, taxes, and the number of children. We compare our estimates to the implications of alternative computable benchmark models of savings behavior in order to assess the likely importance of intended bequests for the wealth/income relationship.Bequests, intervivos transfers, permanent income

Consumption and initial mortgage conditions: evidence from survey data

Economic theory predicts that the consumption path of unconstrained homeowners responds to the interest rate, while the consumption path of credit constrained homeowners is determined by the size and timing of payments (mortgage maturity). We exploit the rapid expansion of mortgage markets during the last decade in Spain and a very detailed survey on household finances to estimate group-specific consumption responses to changes in the credit conditions. Our estimates suggest that the consumption of households headed by an individual with high school respondsmore to mortgage maturity than to the interest rate spread. The consumption of the rest of indebted households is insensitive to loan maturity. Those results are confirmed when we instrument loan maturity exploiting the fact that banks are reluctant to offer contracts with age at maturity above 65. An interpretation of those results is that households headed by middle education individuals, 8% of our sample, behave as credit constrained. JEL Classification: D91, E91credit constraints, household consumption, mortgages

Consumption and Initial Mortgage Conditions: Evidence From Survey Data

Economic theory predicts that the consumption path of unconstrained homeowners responds to the interest rate, while the consumption path of credit constrained homeowners is determined by the size and timing of payments (mortgage maturity). We exploit the rapid expansion of mortgage markets during the last decade in Spain and a very detailed survey on household .nances to estimate group-speci.c consumption responses to changes in the credit conditions. Our estimates suggest that the consumption of households headed by an individual with high school responds more to mortgage maturity than to the interest rate spread. The consumption of the rest of indebted households is insensitive to loan maturity. Those results are con.rmed when we instrument loan maturity exploiting the fact that banks are reluctant to o¤er contracts with age at maturity above 65. An interpretation of those results is that households headed by middle education individuals, 8% of our sample, behave as credit constrained.Credit constraints, mortgages, household consumption

The Impact of Interest-rate Subsidies on Long-term Household Debt: Evidence from a Large Program

The responsiveness of long-term household debt to the interest rate is a crucial parameter for assessing the effectiveness of public policies aimed at promoting specific types of saving. This paper estimates the effect of a reform of Credito Bonificado, a large program in Portugal that subsidized mortgage interest rates, on long-term household debt. The reform established a ceiling in the price of the house that could be financed through the program, and provides plausibly exogenous variation in incentives. Using a unique dataset of matched household survey data and administrative records of debt, we document a large decrease in the probability of signing a new loan after the removal of the subsidy.

The Marginal Propensity to Spend on Adult Children

We examine how much of an extra dollar of parental lifetime resources will ultimately be passed on to adult children in the form of inter vivos transfers and bequests. We infer bequests from the stock of wealth late in life. We use mortality rates and age specific estimates of the response of transfers and wealth to permanent income to compute the expected present discounted values of these responses to permanent income. Our estimates imply that parents pass on between 2 and 3 cents out of an extra dollar of expected lifetime resources in bequests and about 2 cents in transfers. The estimates increase with parental income and are smaller for nonwhites. They imply that about 15 percent of the effect of parental income on lifetime resources of adult children is through transfers and bequests and about 85 percent is through the intergenerational correlation in earnings, although these estimates are sensitive to assumptions about the intergenerational earnings correlation, taxes, and the number of children. We compare our estimates to the implications of alternative computable benchmark models of savings behavior in order to assess the likely importance of intended bequests for the wealth/income relationship.

The impact of interest-rate subsidies on long-term household debt: Evidence from a large program

The responsiveness of long-term household debt to the interest rate is a crucial parameter for assessing the effectiveness of public policies aimed at promoting specific types of saving. This paper estimates the effect of a reform of Credito Bonificado, a large program in Portugal that subsidized mortgage interest rates, on long-term household debt. The reform established a ceiling in the price of the house that could be financed through the program, and provides plausibly exogenous variation in incentives. Using a unique dataset of matched household survey data and administrative records of debt, we document a large decrease in the probability of signing a new loan after the removal of the subsidy.Consumer borrowing, subsidies, quasi-natural experiment

Problemas persistentes y desafíos sin resolver

En los últimos años, la educación superior latinoamericana ha experimentado\ud diversas transformaciones cuantitativas y cualitativas:\ud se ha registrado una expansión y diversificación de la matrícula\ud y de las instituciones. Al mismo tiempo, la educación privada\ud ha ganado terreno y, poco a poco, la educación transnacional hace\ud pie en nuestros países. El surgimiento de agencias para regular estas\ud transformaciones y asegurar pisos de calidad es otro de los datos\ud relevantes. No obstante estos cambios, la educación latinoamericana\ud continúa arrastrando ciertas dificultades, que tienen que\ud ver con el modo en que las instituciones funcionan, con la orientación\ud que, en general, tienen y con marcas profondas de dependencia\ud cultural.\ud El artículo reflexiona sobre estos ejes y concluye con una reflexión\ud sobre los desafíos que deberá afrontar la educación superior\ud latinoamericana de cara al fotuto.In the last years, the Latin American superior education has experienced\ud diverse quantitative and qualitative transformations: there\ud has registered an expansion and diversification of the matriculation\ud and the institutions. At the same time, the private education\ud has taken terrain and, little by little, the transnational education\ud establishes in our countries. The sprouting of agencies to regulate\ud these transformations and to assure floors quality is other relevant\ud Information. Despite these changes, the Latin American education continues dragging certain difficulties, that they have to do\ud with the way in that the institutions work, with the direction\ud that, in general, they have and with deep marks of cultural dependency.\ud The article concentrates on these axes and concludes\ud with a reflection on the challenges that will have to confront the\ud Latin American superior education facing the future

Task specialization and cognitive skills: evidence from PIAAC and IALS

We study how the tasks conducted on the job relate to measures of cognitive skills using data from 18 countries participating in the Programme for the International Assessment of Adult Competences (PIAAC) and from 13 countries that also participate in the International Adult Literacy Study (IALS). We document two main findings. Firstly, individual-fixed effect models suggest that low-educated workers specializing in a particular set of basic tasks -say, in numeric relative to reading or ICT tasks- obtain 10% of one standard deviation higher scores in the domain of the PIAAC assessment most related to those tasks than in the rest -say, numeracy relative to literacy or problem-solving scores. Secondly, a synthetic cohort analysis using repeated literacy assessments in IALS and PIAAC indicates that, among the low-educated, long-run increases in the reading task component of jobs correlate positively with increases in cohort-level literacy scores. The results are stronger among low-skilled workers with less working experience or females -i.e., the set of workers who have had less time to sort in the labor market. An interpretation of our findings is that tasks conducted on the job help in building human capital but are imperfect substitutes of formal schoolin