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The economic consequences of mutual help in extended families

Author

Listed:
  • Jean-Marie Baland

    (CRED - Centre de Recherche en Economie du Developpement - FUNDP - Facultés Universitaires Notre Dame de la Paix)

  • Isabelle Bonjean
  • Catherine Guirkinger
  • Roberta Ziparo

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - École Centrale de Marseille - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université)

Abstract

In the absence of well-developed markets for credit and insurance, extended families play a major role as a traditional system of mutual help. However these arrangements have important consequences on economic choices. In this paper, we use first hand data from Western Cameroon to explore this question. We find that the large majority of transfers follow a given pattern whereby elder siblings support their younger siblings in the early stages of their lives who in turn reciprocate by supporting their elder siblings when they have children. We interpret this pattern as a generalised system of reciprocal credit within the extended family. We propose a simple overlapping generation model to investigate its welfare properties. We then explore the implications of this pattern on labour market outcomes and find evidence of large disincentive effects. This pattern of transfers also implies that younger siblings are more educated but have fewer and less educated children.

Suggested Citation

  • Jean-Marie Baland & Isabelle Bonjean & Catherine Guirkinger & Roberta Ziparo, 2016. "The economic consequences of mutual help in extended families," Post-Print hal-01440288, HAL.
  • Handle: RePEc:hal:journl:hal-01440288
    DOI: 10.1016/j.jdeveco.2016.07.004
    Note: View the original document on HAL open archive server: https://hal-amu.archives-ouvertes.fr/hal-01440288
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    References listed on IDEAS

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    More about this item

    Keywords

    Africa; Extended families; Mutual help; Solidarity; Transfers;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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