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Author: Clarke, George Ronald Gemuseus
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Clarke, George Ronald Gemuseus |
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Redistribution and Family Formation: Theory and Evidence on Individual and Collective Decision Making Ph.D. Dissertation, The University of Rochester, 1996 Cohort(s): NLSY79 Publisher: UMI - University Microfilms, Bell and Howell Information and Learning Keyword(s): Adolescent Fertility; Aid for Families with Dependent Children (AFDC); Childbearing, Adolescent; Endogeneity; Family Formation; Marriage; Simultaneity; Taxes; Transfers, Public Government tax and transfer programs affect many aspects of individual behavior. However, the design of these programs is the result of a collective choice process and this, in turn, might be affected by trends in individual behavior. This thesis studies interactions between these two levels of decision-making. At the individual level, the effects that taxes and transfers have on marriage, fertility and program participation decisions are considered. At the collective level, the size and generosity of cash transfer programs to poor families (AFDC) and the poor aged and disabled (SSI) are considered as the consequence of a political system that responds to the number of recipients, interactions between cash and non-cash transfer programs, and interactions between different levels of government. The thesis begins by examining the effects of public transfers on the fertility of teenage girls. A utility-maximizing, poor, teenage girl is modeled to choose between having a child out-of-wedlock and gaining access to government transfers or not having a child, finishing her education, and then marrying or working. After controlling for the endogeneity of government benefits, statistical analysis shows a large, and robust, correlation between benefit levels and teenage illegitimacy. The next chapter presents a theoretical model where voters with altruistic preferences vote over welfare benefit levels for the poor aged and disabled. Statistical analysis of the theoretical model, allowing for the simultaneity between number of recipients and benefit levels, finds that increases in voter income increase the size of cash benefits. Further, increases in medical expenditures on this group (through Medicaid) decrease cash payments to this group. The final chapter studies whether the difference in the income tax paid by married and unmarried couples with the same incomes (the "marriage tax") affects couples' marriage, divorce, and timing of marriage decisions. Using aggregate data for the United States, statistical analysis finds that the marriage tax encourages divorce and possibly discourage marriage among women under 45. Individual level data from the National Longitudinal Survey of Youth (NLSY) indicates couples strategically time weddings to avoid marriage taxes. |
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Bibliography Citation
Clarke, George Ronald Gemuseus. Redistribution and Family Formation: Theory and Evidence on Individual and Collective Decision Making. Ph.D. Dissertation, The University of Rochester, 1996. |