Do Parental Transfers Reduce Youths' Incentives to Work?

24 Pages Posted: 17 Nov 2009

See all articles by Tao Gong

Tao Gong

University of Maryland Eastern Shore

Abstract

This paper uses data from the National Longitudinal Survey of Youth 1997 to examine the effects that parental transfers from a family have on a youth's labor supply. The results from a fixed-effects two-stage least squares estimator suggest that: (i) parental pocket money reduces youths' incentives to work; (ii) parental allowances have a non-linear effect on hours worked; (iii) the subsample of siblings shows similar patterns that parental transfers have a negative impact on hours worked, although the magnitudes are slightly weaker than the full sample; and (iv) the response to parental transfers varies by age.

Suggested Citation

Gong, Tao, Do Parental Transfers Reduce Youths' Incentives to Work?. LABOUR, Vol. 23, Issue 4, pp. 653-676, December 2009. Available at SSRN: https://ssrn.com/abstract=1505068 or http://dx.doi.org/10.1111/j.1467-9914.2009.00465.x

Tao Gong (Contact Author)

University of Maryland Eastern Shore ( email )

11868 Academic Oval
Princess Anne, MD 21853
United States

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