Insurance in Extended Family Networks

60 Pages Posted: 6 Apr 2015 Last revised: 16 Jan 2022

See all articles by Orazio Attanasio

Orazio Attanasio

Dept of Economics Yale University; Institute for Fiscal Studies (IFS); University College London - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Costas Meghir

Yale University; Yale University - Cowles Foundation; Institute for Fiscal Studies (IFS); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Corina Mommaerts

University of Wisconsin - Madison - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: April 2015

Abstract

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 find that over 60% of shocks to household income are potentially insurable within extended family networks. However, we find little evidence that the extended family provides insurance for such idiosyncratic shocks.

Suggested Citation

Attanasio, Orazio and Meghir, Costas and Mommaerts, Corina, Insurance in Extended Family Networks (April 2015). NBER Working Paper No. w21059, Available at SSRN: https://ssrn.com/abstract=2590222

Orazio Attanasio (Contact Author)

Dept of Economics Yale University ( email )

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Institute for Fiscal Studies (IFS)

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University College London - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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National Bureau of Economic Research (NBER)

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Costas Meghir

Yale University ( email )

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Yale University - Cowles Foundation ( email )

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Institute for Fiscal Studies (IFS) ( email )

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United Kingdom

National Bureau of Economic Research (NBER) ( email )

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Centre for Economic Policy Research (CEPR)

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United Kingdom

IZA Institute of Labor Economics

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Corina Mommaerts

University of Wisconsin - Madison - Department of Economics ( email )

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