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Understanding Interhousehold Transfers in a Transition Economy: Evidence from Russia

Listed author(s):
  • Kuhn, Randall
  • Stillman, Steven

This article uses data from the Russian Longitudinal Monitoring Survey to describe the patterns and determinants of private 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 have left a population that 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 elderly and "empty-nest" households to households in the early part of the life course. This is especially true for older households in rural areas. Descriptive statistical models show a tendency toward increasing net transfer outflow as households age, expressed first through declining transfer receipt and later through increased giving of transfers. Although the tendency toward net transfer outflow slows down for the elderly, we also find that elderly pension income, which proved more consistent through the initial posttransition period than wages or other public transfers, are redistributed to younger households.

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File URL: http://dx.doi.org/10.1086/423256
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Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 53 (2004)
Issue (Month): 1 (October)
Pages: 131-156

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Handle: RePEc:ucp:ecdecc:y:2004:v:53:i:1:p:131-56
Contact details of provider: Web page: http://www.journals.uchicago.edu/EDCC/

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  1. Donald Cox & Emmanuel Jimenez & Wlodek Okrasa, 1996. "Family Safety Nets and Economic Transition: A Study of Worker Households in Poland," Boston College Working Papers in Economics 328., Boston College Department of Economics.
  2. Duncan Thomas & Elizabeth Frankenberg & James P. Smith, 2004. "Lost but Not Forgotten: Attrition and Follow-up in the Indonesia Family Life Survey," Labor and Demography 0408007, EconWPA.
  3. Anne Case & Angus Deaton, 1996. "Large Cash Transfers to the Elderly in South Africa," NBER Working Papers 5572, National Bureau of Economic Research, Inc.
  4. Jensen, Robert T. & Richter, Kaspar, 2004. "The health implications of social security failure: evidence from the Russian pension crisis," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 209-236, January.
  5. Samuel Preston, 1984. "Children and the elderly: Divergent paths for America’s dependents," Demography, Springer;Population Association of America (PAA), vol. 21(4), pages 435-457, November.
  6. Townsend, R.M., 1991. "Risk and Insurance in Village India," University of Chicago - Economics Research Center 91-3, Chicago - Economics Research Center.
  7. Lam, D. & Schoeni, R.F., 1993. "Private Interhousehold Transfers of Money and Time: New Empirical Evidence," Papers 93-26, RAND - Labor and Population Program.
  8. Lillard, L-A & Willis, R-J, 1997. "Motives for Intergenerational Transfers. Evidence from Malaysia," Papers 97-04, RAND - Reprint Series.
  9. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-546, June.
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