| This dissertation attempts to provide economic evidence on the effect of impure altruism in educational spending in households. In this paper, we examine the hypothesis that educational expenditure by parents is strongly affected by both a Veblen effect and altruistic, paternalistic preferences.;Chapter 2 contains a review of the literature on intergenerational transfer model.;In Chapter 3, we consider models of parental human capital investment with and without reverse transfers from adult child to parents. We then derive testable restrictions and study the nature of optimal parental human capital investment in children. The restrictions allow us to test the models for consistency with the data contained in the Annual Report on the Family Income and Expenditure Survey (FIES) and Occupational Wage Survey (OWS).;In Chapter 4, we use official household data to document families' private educational expenses and to compare the magnitudes of educational expenditure to other household expenditures during 1980s and 1990s. After describing the data and variables of our study, we carry out econometric testing and report the empirical results.;Chapter 5 concludes the paper. Our findings provide insights into the degree of altruism in household heads and efficiency of the existing pattern of education expenditure in Korea. |
