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Economics of parenting: empirical estimation, theoretical analysis, and policy recommendations.

23nd National Competition for Economic Research Grants

Economic analysis

Senior Researcher : Anastasia Terskaya

Abstract

How do economic factors like income, wealth, or pensions influence family formation and fertility? How do decisions regarding how much is invested in children contribute to economic inequality? Do parents have an aversion to inequality? Understanding the factors that shape family formation and how family decisions contribute to inequality is crucial for policy design, especially in European countries where population aging, driven by low fertility rates, raises concerns about the sustainability of pension systems and other public policies. Although theoretical research in the field of family economics is extensive, rigorously testing some of the central predictions of these models has proven exceptionally challenging. These models generate quantitative predictions about the impact of exogenous changes in prices, wages, unearned income, or children's inherent abilities. The problem is that changes in these variables are rarely purely exogenous.

The aim of this project is to rigorously test several key predictions of established economic models and to develop new models within family economics. The research will focus on two main areas. First, it will investigate the economic factors that contribute to family formation, fertility rates, and parental investments, including parenting styles. Second, the project will explore whether parental investments are driven by concerns for equality or efficiency, and to what extent. To carry out this project, I will use a combination of theoretical and empirical modeling techniques, such as overlapping generations models, marriage market models, as well as administrative and panel data, survey data, genetic data, and international censuses. Through these methods, the objective is twofold: to disseminate knowledge and results through publications in internationally recognized economics journals, and to provide insights into the direct, indirect, and unintended effects of public policies and how family decisions may interact with them.

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