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Understanding Interhousehold Transfers in a Transition Economy: Evidence from Russia

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Author Info

  • Kuhn, Randall

    ()
    (University of Colorado, Boulder)

  • Stillman, Steven

    ()
    (University of Otago)

Abstract

This paper uses data from the Russian Longitudinal Monitoring Survey to describe and model the determinants of interhousehold transfers. Russian households have experienced large reductions in income during the post-Soviet transition period, with a particularly severe decline occurring in the fall of 1998. Sharply declining fertility, increasing mortality, and past demographic catastrophes has left a population which is both young (few elderly) and old (one of the oldest working-age populations in the world). Informal networks in Russia are likely to take on distinctive characteristics as the country’s economic institutions are underdeveloped and there is a very limited social safety net, while household structure closely resembles that found in much wealthier countries. Although it is often assumed that the elderly in Russia are a highly vulnerable economic group, we actually find that transfers flow strongly from the elderly to their adult children, whom are typically in the early part of the life-course (i.e. in school, starting to work, or recently married). This is especially true for the elderly in rural areas. While households with higher longer-term resources receive on net more transfers, we also find strong evidence that transfers respond to economic needs (i.e. transitory fluctuations in resources).

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 574.

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Length: 43 pages
Date of creation: Sep 2002
Date of revision:
Publication status: published in: Economic Development and Cultural Change, 2004, 53 (1), 131-56
Handle: RePEc:iza:izadps:dp574

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Keywords: aging; interhousehold transfers; transition economies; household structure; Russia;

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Cited by:
  1. Matthieu CLEMENT (GREThA-GRES), 2007. "The relation between private transfers and household income on looking at altruism, exchange and risk-sharing hypotheses. An empirical analysis applied to Russia (In French)," Cahiers du GRES, Groupement de Recherches Economiques et Sociales 2007-14, Groupement de Recherches Economiques et Sociales.
  2. Mark C. Foley & William Pyle, 2005. "Household Savings in Russia during the Transition," Middlebury College Working Paper Series, Middlebury College, Department of Economics 0522, Middlebury College, Department of Economics.
  3. Grogan, Louise, 2013. "Household formation rules, fertility and female labour supply: Evidence from post-communist countries," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1167-1183.
  4. Dimova, Ralitza & Wolff, François-Charles, 2008. "Are private transfers poverty and inequality reducing? Household level evidence from Bulgaria," Journal of Comparative Economics, Elsevier, vol. 36(4), pages 584-598, December.

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