Job Insecurity and Youth Emancipation: A Theoretical Approach

Becker, Sascha O.; Bentolila, Samuel; Fernandes, Ana; Ichino, Andrea (October 2005). Job Insecurity and Youth Emancipation: A Theoretical Approach (Discussion Papers 05-14). Bern: Department of Economics

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In this paper, we propose a theoretical model to study the effect of income insecurity of parents and offspring on the child’s residential choice. Parents are partially altruistic toward their children and will provide financial help to an independent child when her income is low relative to the parents’. We show that first-order stochastic dominance (FOSD) shifts in the distribution of the child’s future income (or her parents’) will have ambiguous effects on the child’s residential choice. The analysis identifies altruism as the source of ambiguity in the results. If parents are selfish or the joint income distribution of parents and child places no mass on the region where transfers are provided, a FOSD shift in the distribution of the child’s (parents’) future income will reduce (raise) the child’s current income threshold
for independence.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Fernandes, Ana

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Discussion Papers

Publisher:

Department of Economics

Language:

English

Submitter:

Lars Tschannen

Date Deposited:

02 Oct 2020 10:31

Last Modified:

02 Oct 2020 10:31

JEL Classification:

D1, J1, J2

BORIS DOI:

10.7892/boris.145678

URI:

https://boris.unibe.ch/id/eprint/145678

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