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Changes in household composition as a shock-mitigating strategy

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Author Info

  • Kseniya Abanokova

    ()
    (National Research University Higher School of Economics (Moscow, Russia).)

  • Michael Lokshin

    ()
    (World Bank and National Research University Higher School of Economics (Moscow, Russia). “Centre for Labour Market Studies (CLMS)”)

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 tradeoff between taking advantages of economies of scale and specialization when living with others and individual privacy. Consumption smoothing is achieved by forgoing privacy during a crisis and results in an increase in household size. Our empirical results suggest that members of the households that experienced negative income shocks are more likely to move in with others than households whose income remained the same or increased.

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Bibliographic Info

Paper provided by National Research University Higher School of Economics in its series HSE Working papers with number WP BRP 38/EC/2013.

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Length: 20 pages
Date of creation: 2013
Date of revision:
Publication status: Published in WP BRP Series: Economics / EC, November 2013, pages 1-20
Handle: RePEc:hig:wpaper:38/ec/2013

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Related research

Keywords: household structure; coping strategy; macroeconomic shocks; Russia;

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  1. Christopher Gerry & Carmen A Li, 2007. "Consumption Smoothing and Vulnerability in Russia," William Davidson Institute Working Papers Series wp885, William Davidson Institute at the University of Michigan.
  2. Guido Friebel & Sergei Guriev, 2005. "Attaching Workers Through In-kind Payments: Theory and Evidence from Russia," Working Papers w0057, Center for Economic and Financial Research (CEFIR).
  3. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
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