Changes in Household Composition as a Shock‐Mitigating Strategy

18 Pages Posted: 9 Apr 2015

See all articles by Michael Lokshin

Michael Lokshin

World Bank - Development Research Group (DECRG); National Research University Higher School of Economics

Kseniya Abanokova

National Research University Higher School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 2015

Abstract

This paper uses data from the Russian Longitudinal Survey that span the two recent economic recessions of 1998 and 2008 to study the effect of declining incomes on household composition. We hypothesize that individuals face a trade‐off between taking advantage of economies of scale and specialization when living with others, and individual privacy. Consumption smoothing is achieved by forgoing privacy during the crisis and results in increases in household size. Our empirical results suggest that members of households that experienced negative income shocks are more likely to move in with others compared to individuals residing in households whose income remained the same or increased.

Keywords: Household structure, coping strategy, macroeconomic shocks, Russia

Suggested Citation

Lokshin, Michael and Abanokova, Kseniya, Changes in Household Composition as a Shock‐Mitigating Strategy (April 2015). Economics of Transition, Vol. 23, Issue 2, pp. 371-388, 2015. Available at SSRN: https://ssrn.com/abstract=2592224 or http://dx.doi.org/10.1111/ecot.12067

Michael Lokshin (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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National Research University Higher School of Economics

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Kseniya Abanokova

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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