Insurance in Extended Family Networks
Corina Mommaerts and
Costas Meghir ()
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Orazio Attanasio: University College London & Institute for Fiscal Studies
Corina Mommaerts: Dept. of Economics, Yale University, http://economics.yale.edu/
No 1996R, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University
We investigate partial insurance and group risk sharing in extended family networks. Our approach is based on decomposing income shocks into group aggregate and idiosyncratic components, allowing us to measure the extent to which each component is insured. We apply our framework to extended family networks in the United States by exploiting the unique intergenerational structure of the Panel Study of Income Dynamics. We ?nd that over 60% of shocks to household income are potentially insurable within extended family networks. However, we ?nd little evidence that the extended family provides insurance for such idiosyncratic shocks.
Keywords: Incomplete markets; Partial Insurance; Consumption smoothing; Extended Family Networks; Savings; Intergenerational transfers; Stochastic income processes (search for similar items in EconPapers)
JEL-codes: D12 D31 D91 E21 E24 H31 (search for similar items in EconPapers)
Date: 2015-03, Revised 2018-06
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Working Paper: Insurance in extended family networks (2018)
Working Paper: Insurance in Extended Family Networks (2015)
Working Paper: Insurance in extended family networks (2015)
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