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Understanding Interhousehold Transfers in a Transition Economy: Evidence from Russia

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  • Kuhn, Randall
  • Stillman, Steven

Abstract

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.

Suggested Citation

  • Kuhn, Randall & Stillman, Steven, 2004. "Understanding Interhousehold Transfers in a Transition Economy: Evidence from Russia," Economic Development and Cultural Change, University of Chicago Press, vol. 53(1), pages 131-156, October.
  • Handle: RePEc:ucp:ecdecc:y:2004:v:53:i:1:p:131-56
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    File URL: http://dx.doi.org/10.1086/423256
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    References listed on IDEAS

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    1. Schoeni, Robert F, 1997. "Private Interhousehold Transfers of Money and Time: New Empirical Evidence," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 43(4), pages 423-448, December.
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    6. Case, Anne & Deaton, Angus, 1998. "Large Cash Transfers to the Elderly in South Africa," Economic Journal, Royal Economic Society, vol. 108(450), pages 1330-1361, September.
    7. Lee Lillard & Robert Willis, 1997. "Motives for interqenerational transfers: Evidence from Malaysia," Demography, Springer;Population Association of America (PAA), vol. 34(1), pages 115-134, February.
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    Cited by:

    1. Matthieu CLEMENT (GREThA), 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 GREThA 2007-08, Groupe de Recherche en Economie Théorique et Appliquée.
    2. 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.
    3. Mark C. Foley & William Pyle, 2005. "Household Savings in Russia during the Transition," Middlebury College Working Paper Series 0522, Middlebury College, Department of Economics.
    4. 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.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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