The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Sep, 1984, Volume 52, Issue 5
https://doi.org/0012-9682(198409)52:5<1191:IIHANC>2.0.CO;2-T
p. 1191-1198
Assaf Razin, Efraim Sadka, Marc Nerlove
The implications for efficient allocation of parents' inability to force transfers among siblings are explored. When there are differences in abilities of children within families, such transfers may be necessary to achieve a first-best solution. In the absence of such transfers, a tax on earned income and a subsidy to inheritance are useful second-best tools, whereas subsidies to investments in human capital or physical capital are not desirable.
