Risk-sharing within families: Evidence from the Health and Retirement Study
Serife Akin and
Oksana Leukhina ()
Journal of Economic Dynamics and Control, 2015, vol. 52, issue C, 270-284
We report strong empirical support for the presence of self-interest-based risk sharing within extended families in the U.S. A standard model of self-interest-based risk sharing predicts that the share of current family income consumed by a child positively depends on that child׳s permanent income. It follows that parental transfers to children that are expected to earn more over the period of risk-sharing arrangements should exhibit less sensitivity to the recipient׳s income fluctuations. We test this distinguishing prediction of self-interest-based risk sharing by exploiting the variation of transfer receipts among siblings, observed over 17 years of longitudinal data spanned by the Health and Retirement Study.
Keywords: Risk sharing; Informal insurance arrangements; Inter vivos transfers (search for similar items in EconPapers)
JEL-codes: D1 E2 (search for similar items in EconPapers)
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Working Paper: Risk-Sharing Within Families: Evidence From the Health and Retirement Study (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:52:y:2015:i:c:p:270-284
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