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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.
Authors
CPP Co-Director
Orazio is an International Research Fellow at the IFS, a Professor at Yale and a Research Associate at the National Bureau of Economic Research.
Research Fellow Yale University
Costas is a Research Fellow of the IFS and a Professor of Economics at Yale University and a Visiting Professor at University College London.
Corina Mommaerts
Working Paper details
- DOI
- 10.1920/wp.ifs.2018.1718
- Publisher
- The IFS
Suggested citation
O, Attanasio and C, Meghir and C, Mommaerts. (2018). Insurance in extended family networks. London: The IFS. Available at: https://ifs.org.uk/publications/insurance-extended-family-networks (accessed: 25 April 2024).
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