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Extended Family and Kinship Networks: Economic Insights and Evolutionary Directions

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  • Cox, Donald
  • Fafchamps, Marcel

Abstract

What do we know about the role of extended families and kinship networks for redistributing resources? What gaps in our knowledge most need to be filled? How can we best organize current work and identify priorities for future research? These questions are important for several reasons: households in developing countries depend on friends and relatives for their livelihood and sometimes their survival; help exchanged within extended families and kin networks affects the distribution of economic well-being, and this private assistance and exchange can interact with public income redistribution. Yet despite rapid recent progress there remain significant deficiencies in our understanding of the economics of extended families. Researchers confront a large and sometimes bewildering array of findings. We review and assess this literature by starting with an emphasis on standard economic concerns, most notably the possible interaction between government-provided social insurance and private kinship networks. Our review of the evidence suggests that the specter of complete "crowding out," whereby introduction or expansion of public transfers merely supplants private transfers, appears quite remote, though not impossible. However, numerous studies do suggest partial - but nonetheless substantial - crowding out, on the order of a 20-to-30-cent reduction in private transfers per dollar increase in public transfers. But the range of estimated effects is exceedingly wide, with many studies suggesting little private transfer response at all. Reconciling and explaining these disparate findings is a priority for future research. Theorizing about the economics of families should move beyond its concentration on income effects. The empirical literature indeed indicates that non-economic variables, such as age and gender, can have a powerful association with private transfers. We suggest that economists tap into the extensive non-economic literature that takes an evolutionary approach to the family. We show that this literature provides valuable guidance for modeling the effects of age, sex and relatedness in the interactions among extended family members. The evolutionary literature has much to offer economists interested in family behavior by proposing novel interpretations of existing findings and pointing out new and fruitful directions for future research. We encourage economists to pay more attention to this approach when studying kinship networks.

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This chapter was published in:

  • T. Paul Schultz & John A. Strauss (ed.), 2008. "Handbook of Development Economics," Handbook of Development Economics, Elsevier, edition 1, volume 4, number 5, January.
    This item is provided by Elsevier in its series Handbook of Development Economics with number 5-58.

    Handle: RePEc:eee:devchp:5-58

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    Web page: http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_HE/description

    Related research

    Keywords: extended family; kinship network; private transfers; remittances; inter-household transfers; crowding out; risk sharing; Hamilton's rule; cultural norms;

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    Cited by:
    1. Richard P.C. Brown & Eliana V. Jimenez, 2008. "A Mixed-Motives Model of Private Transfers with Subjectively-Assessed Recipient Need: Evidence from a Poor, Transfer-Dependent Economy," Discussion Papers Series 365, School of Economics, University of Queensland, Australia.
    2. Richard P.C. Brown & Eliana V. Jimenez, 2008. "Remittances and Subjective Welfare in a Mixed-Motives Model: Evidence from Fiji," Discussion Papers Series 370, School of Economics, University of Queensland, Australia.
    3. Christine Binzel & Dietmar Fehr, 2010. "Social Relationships and Trust," SFB 649 Discussion Papers SFB649DP2010-028, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    4. Binzel, Christine & Fehr, Dietmar, 2013. "Social distance and trust: Experimental evidence from a slum in Cairo," Journal of Development Economics, Elsevier, vol. 103(C), pages 99-106.
    5. Angelucci, Manuela & De Giorgi, Giacomo & Rangel, Marcos A. & Rasul, Imran, 2009. "Family Networks and School Enrolment: Evidence from a Randomized Social Experiment," IZA Discussion Papers 4497, Institute for the Study of Labor (IZA).
    6. Yoshito Takasaki, 2011. "Fraud and Poverty: Exploring Ex Ante Victim Data," Tsukuba Economics Working Papers 2011-002, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
    7. De Weerdt, Joachim & Genicot, Garance & Mesnard, Alice, 2014. "Asymmetry of Information within Family Networks," IZA Discussion Papers 8395, Institute for the Study of Labor (IZA).
    8. David Dreyer Lassen & Helene Bie LilleĆør, 2008. "Informal Institutions and Intergenerational Contracts: Evidence from Schooling and Remittances in Rural Tanzania," CAM Working Papers 2008-03, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
    9. Binzel, Christine & Fehr, Dietmar, 2013. "Giving and sorting among friends: Evidence from a lab-in-the-field experiment," Discussion Papers, Research Unit: Market Behavior SP II 2013-207, Social Science Research Center Berlin (WZB).
    10. De Fraja, Gianni, 2009. "The origin of utility: Sexual selection and conspicuous consumption," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 51-69, October.
    11. Joachim De Weerdt & Garance Genicot & Alice Mesnard, 2014. "Asymmetry of Information within Family Networks," CReAM Discussion Paper Series 1433, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.

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