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This paper develops a model of child custody based on an incomplete-contract approach to the allocation of property rights. Because of the presence of transaction costs in marriage, altruistic parents cannot contract upon the investments they make into their children, but can reduce the resulting inefficiencies by determining ex ante the parent who would be allocated custody in case they divorce. (ISER)

Custody of children

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This paper investigates the links between the socio-economic position of parents and the socio-economic position of their offspring and, through the marriage market, the socio-economic position of their offspring's parents-in-law. Using the Goldthorpe-Hope score of occupational prestige as a measure of status and samples drawn from the British Household Panel Survey 1991-1999, we find that the intergenerational elasticity is around 0.2 for men and between 0.17 and 0.23 for women. On average, the intragenerational correlation is lower, and of the order of 0.15 to 0.18, suggesting that the returns to human capital, which is transmitted across generations by altruistic parents, contribute more to social status than assortative mating in the marriage market. Substantially higher estimates are reported when measurement error is accounted for. We also find strong nonlinearities, whereby both inter- and intra-generational elasticities tend to increase with parental status. (ISER)

Mate selection --- -Mate selection -

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Using data from the Health and Retirement Study (HRS), we make two contributions to the literature on end-of-life transfers. First, we show that unequal bequests are much more common than generally recognized, with one-third of parents with wills planning to divide their estates unequally among their children. These plans for unequal division are particularly concentrated in complex families, which are of two types: families with stepchildren and families with genetic children with whom the parent has had no contact, e.g., children from previous marriages. We find that in complex families past and current contact between parents and children reduces or eliminates unequal bequests. Second, although the literature focuses on the bequest intentions of parents who have made wills, we find that many older Americans have not made wills. Although the probability of having a will increases with age, 30 percent of HRS respondents aged 70 and over have no wills. Of HRS respondents who died between 1995 and 2010, 38 percent died without wills. Thus, focusing exclusively on the bequest intentions of parents who have made wills may provide an incomplete and misleading picture of end-of-life transfers.

Zonder onderwerpscode: economie