Vicky Barham

Education and the Poverty Trap

An overlapping generations models is constructed in which individual wealth is related to educational attainment, and in which liquidity constraints may induce children to invest in a sub-optimal level of education given their ability. Borrowing for educational attainment is obtained from within the family. Abilities differs among children and may be related to parental ability. Stationary state equilibria are found to exist in which children of poorer families are caught in a poverty trap because of an inability to finance their education. The role of redistributive policy is studied in this context.

Charitable Giving, Volunteering, and the Paid Labor Market

Among the few articles that jointly determine an individuals gifts of time and money, there exists disagreement as to whether these gifts are complements or substitutes. The authors try to shed some light on this debate by expanding the analysis of private contributions to take account of whether or not the individual is working in the paid labor market. The analysis indicates that gifts of time and money are largely complementary to each other, especially for employed individuals. The donations of employed males also appear to be crowded out by government expenditures. The fact that employment status as well as gender affect how individuals respond to fiscal stimulus may have important policy implications.

Volunteer work and club size: Nash equilibrium and optimality

The non-cooperative provision of public goods is analyzed in the context of a two-stage game in which club size is determined endogenously. Equilibrium club size and voluntary labour supply are shown to be inefficient. The impact of optimally-chosen fiscal policies using simple instruments is studied. When agents do not derive non-pecuniary benefits from volunteer work, lump-sum grants can be used to implement the first-best equal treatment allocation but private provision is fully crowded out. Otherwise, it is found that simple fiscal instruments cannot implement the first-best equal-treatment allocation unless club size is directly regulated.

Public Policies and Private Decisions: The Effect of Child Support Measures on Marriage and Divorce

Child support measures may affect the composition of households by altering the costs associated with marriage and divorce. In this paper, we use a rich panel data set, the Survey of Labour Income Dynamics, to examine the extent to which household formation and dissolution decisions were affected by the major child support reforms introduced in Canada in 1997. Our results suggest that they have had a small but positive impact on the decision to marry and a positive and important impact on the decision to divorce.

Are the New Child-Support Guidelines "Adequate" or "Reasonable"?

Child-support awards constitute an important source of revenue for many single-parent households. The inadequacy of these child-support awards is one of the factors cited to justify the governments recent implementation in January 1997 of a new child-support Guidelines. This paper evaluates these Guidelines by examining how they compare to six standards of adequacy and reasonableness. We are led to conclude that any child-support system based solely on the incomes of former spouses is unlikely to succeed. One way out of this dilemma is to use a broader measure of wealth when calculating child-support payments which may make it possible to reduce the economic impact of divorce on children.