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Risk-Sharing Within Families: Evidence From the Health and Retirement Study

Author

Listed:
  • S. Nuray Akin

    (Department of Economics, University of Miami)

  • Oksana Leukhina

    (Department of Economics, University of Washington)

Abstract
We report strong empirical support for the presence of a risk-sharing motive of within-family monetary flows. A standard model of risk-sharing predicts that the share of current family income consumed by a child positively depends on that child's lifetime contribution to the present value of the total family income. Therefore, sensitivity of transfer receipts to fluctuations in recipient's current income is smaller for children who contribute more. We test this distinguishing prediction of the risk-sharing model by exploiting the observed variation of parental transfers to siblings over 17 years in a longitudinal dataset derived from the Health and Retirement Study.

Suggested Citation

  • S. Nuray Akin & Oksana Leukhina, 2013. "Risk-Sharing Within Families: Evidence From the Health and Retirement Study," Working Papers 2013-09, University of Miami, Department of Economics.
    • Handle: RePEc:mia:wpaper:2013-09
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    References listed on IDEAS

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    2. Arthur Charpentier & Lariosse Kouakou & Matthias Lowe & Philipp Ratz & Franck Vermet, 2021. "Collaborative Insurance Sustainability and Network Structure," Papers 2107.02764, arXiv.org, revised Sep 2022.
    3. Leandro De Magalhães & Dongya Koh & Raül Santaeulàlia-Llopis, 2016. "Consumption and Expenditure in Sub-Saharan Africa," Bristol Economics Discussion Papers 16/677, School of Economics, University of Bristol, UK, revised 07 Oct 2016.

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    More about this item

    Keywords

    Risk-sharing; altruism; within-family transfers; Health and Retirement Study;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • J1 - Labor and Demographic Economics - - Demographic Economics

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