I know a lot of parents are on the fence about whether to give an allowance or not. I personally think it is very important in teaching children how to be responsible savers and consumers in the years to come.
My In-laws would be less than happy about what I have to say, but I have teenaged nieces and nephews in HS that did not and do not get allowances nor have jobs. They just get money from their parents as they need it, and as a result none have any apparent concept of how hard it is to earn money, let alone do they know how to wisely spend it.
Their parents provide their cell phones, clothes, and more and they do nothing to earn what I consider "privileges" not necessesities as so many people come to think of cell phones, cares etc. for teens today. Unfortunately, these young people are turning into the kind that think all christmas presents should cost over $100, be electronic, or carry a label. They think credit cards are cash, and money grows on trees in abundance. They have no concerns about credit rating, and debt. Neither save money in accounts. I think their parents are doing them a great disservice! Especially since they will be on their own soon and are probably not prepared on how to handle their money.
My parents didn't give me an allowance either, and I think it greatly influenced how I "mishandled" my money when I went away to college. It was rough going, but eventually I learned how to manage money, but I sure would have appreciated learning BEFORE I left home.
I think the perfect age to start giving a child an allowance is between 7 and 8. Any younger, and they really don't have a full understanding of why we save etc. hence the feelings on the part of some that allowance is somehow bribary.
By the way, I don't think paying an older child to do chores is "bribary". Until a child can get a real job, there is no other way to teach them how things work in our very commercial world. If they have no concept of a work ethic, they will not appreciate money in a healthy way. If they work hard for that money, they will be less likely to spend it frivolously. They will at an early age learn to discern how, when, and what to spend their money on.
I think the pay should be scaled to their age. If they're still in the toy buying years (7-10), make their salary a range that could afford them to buy the type of toys they enjoy. (A bi-weekly salary of $5-$10 is reasonable).
For older children (10-14), I scale their salary to what you as a family spend on their basic needs such as food, clothes, and school supplies. This way you won't break the family buget, as this is what you'd normally spend on the child anyway. At this age, I'd encourage the children to start using their money to buy these necessities versus just things for themselves, and out of that money teach them to budget for the extras like a video game for example.
You could also encourage them to put aside money for church/charity, and even college. Remember, the amounts do not have to be huge. It's the principal that counts. If they dedicate $2 to charity and $2 to college, it can add up each week, and by years end. They'll learn real quick the value of money. I'd also at this age, consider getting a low limit debit/secured credit card where they/you secure the cash in the account, in addition to a savings(which hopefully they already have) and checking account. I'd help them manage these small but valuable accounts. Talk with them about budgeting etc. so they begin to start understanding how to use credit etc. in a safeway that won't hurt their credit rating!
Afterall, this is the time to start preparing them for reality. In high school they'll hopefully get a real job, where they'll earn real money, but wouldn't it be nice if they already established good habits on spending wisely and for what they really need...like saving for college!