I analyze models that focus on two households decisions: the number of children and the transfers, broadly defined, given by parents to their children.
In the first chapter I thoroughly analyze the formal structure of a generalization of the household problem introduced in the seminal work by Barro and Becker. The maximization problem introduced by Barro and Becker has certain features that makes it not a standard discounted dynamic problem. In this chapter I introduce a different representation for a generalized version of their problem, which is formally equivalent to the original one. This new representation considerably simplifies the analysis of the problem, and enables me to state and show most of the standard dynamic programming results.
In the second chapter I use the tools developed in the first to study social mobility. More specifically to study the persistence of income and wealth across generations in models that incorporates both the fertility decision and the intergenerational transfers decision. There is an abundant literature that study the determinants of the fertility decision; there is also an abundant literature that study the determinants of the intergenerational transfers decision and its relation with social mobility. In this chapter I attempt to combine both lines of research building upon the work by Barro and Becker. The dynamics implied by models that combine elements from the line of research that emphasizes the fertility decision with elements from the line that emphasizes the intergenerational transfer decision are qualitatively different from the dynamics obtained when any one of the two decisions is ignored. One conclusion is that for the models to be broadly consistent simultaneously with the stylized facts about fertility and persistence of income and wealth across generations the key feature to consider is the following. The extent to which the cost of child bearing activities for the current generation is influenced by transfers made from previous generations to the current generation (for example financing education) is the the crucial feature that relates to both fertility and persistence of income and wealth across generations.
My Research