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Welfare rationales for conditionality of cash transfers

Title data

Napel, Stefan ; Mookherjee, Dilip:
Welfare rationales for conditionality of cash transfers.
In: Journal of Development Economics. (24 March 2021) . - No. 102657.
ISSN 0304-3878
DOI: https://doi.org/10.1016/j.jdeveco.2021.102657

Official URL: Volltext

Abstract in another language

We study efficiency and distributional effects of conditioning transfers on educational investments by parents, in an OLG model with missing financial markets and heterogeneity of learning ability. Conditional cash transfers (CCT) can be designed to generate a Pareto improvement relative to either laissez faire, or unconditional transfers such as universal basic income proposals. This applies irrespective of whether the status quo involves underinvestment or overinvestment in education from a first-best perspective, or the nature or extent of parental altruism towards children. The CCT corrects a market failure of insurance and lack of consumption smoothing for parents with respect to random realizations of ability of their offspring.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: Human capital incentives; Conditional cash transfers; Universal basic income
Institutions of the University: Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics IV - Microeconomics > Chair Economics IV - Microeconomics - Univ.-Prof. Dr. Stefan Napel
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences > 320 Political science
300 Social sciences > 330 Economics
Date Deposited: 25 Mar 2021 08:13
Last Modified: 25 Mar 2021 08:13
URI: https://eref.uni-bayreuth.de/id/eprint/64316