The effect of incomplete markets on parental investments is investigated. Uninsured risk and credit constraints can distort the timing of parental investments, causing them to be delayed relative to what would occur under full-insurance. Age-dependent subsidies, taxes or transfers can all possibly correct this. Analytical results are provided, and a numerical life-cycle model provides quantitative results. Data on ability and parental investment dynamics are used to calibrate the model. A sequence of optimal policy experiments is conducted beginning with a simple reform of the tax and transfer schedule and ending with more complex parent-specific tax parameters and investment subsidies, all of which vary with child age. The final experiment generates substantial improvements in the ability distribution and a consumption equivalent welfare gain that is 2.5 times as large as simply reforming the tax schedule. About 1/4 of this incremental gain results from including child-age dependent policies that alleviate distortions of parental investment timing.

研究了不完全市场对父母投资的影响。未投保的风险和信用约束可能会扭曲母公司投资的时间安排，导致它们相对于全保情况下发生的情况有所延迟。与年龄相关的补贴、税收或转移支付都可能纠正这一点。提供分析结果，数字生命周期模型提供定量结果。能力和父母投资动态数据用于校准模型。一系列最优政策实验从简单的税收和转移计划改革开始，到更复杂的特定于父母的税收参数和投资补贴结束，所有这些都随着孩子的年龄而变化。最后的实验在能力分配和消费等值福利收益方面产生了显着改善，这是简单改革税收制度的 2.5 倍。大约 1/4 的增量收益来自于包括儿童年龄依赖政策，以减轻父母投资时机的扭曲。