Bailing out the Kids: New Evidence on Informal Insurance from one Billion Bank Transfers
Publikation: Working paper › Forskning
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Bailing out the Kids: New Evidence on Informal Insurance from one Billion Bank Transfers. / Andersen, Asger Lau; Johannesen, Niels; Sheridan, Adam.
2020.Publikation: Working paper › Forskning
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TY - UNPB
T1 - Bailing out the Kids: New Evidence on Informal Insurance from one Billion Bank Transfers
AU - Andersen, Asger Lau
AU - Johannesen, Niels
AU - Sheridan, Adam
PY - 2020/7/7
Y1 - 2020/7/7
N2 - We combine transaction-level data from the largest retail bank in Denmark and individual-level data from government registers to study informal insurance within social networks. Accounting for transfers in cash (money transfers) and in kind (cohabitation), we estimate that family and friends jointly replace around 7 cents of the marginal dollar lost within the bottom income decile, but much less at higher income levels. We document that informal insurance covers other adverse events than income losses: expenditure shocks, family ruptures and financial distress. Parents appear to be the key providers of informal insurance with a small amount of insurance coming from siblings and virtually none from grandparents and friends. Replacement rates vary monotonically with parent economic resources.
AB - We combine transaction-level data from the largest retail bank in Denmark and individual-level data from government registers to study informal insurance within social networks. Accounting for transfers in cash (money transfers) and in kind (cohabitation), we estimate that family and friends jointly replace around 7 cents of the marginal dollar lost within the bottom income decile, but much less at higher income levels. We document that informal insurance covers other adverse events than income losses: expenditure shocks, family ruptures and financial distress. Parents appear to be the key providers of informal insurance with a small amount of insurance coming from siblings and virtually none from grandparents and friends. Replacement rates vary monotonically with parent economic resources.
KW - informal insurance
KW - altruism
KW - private transfers
KW - risk sharing
U2 - 10.2139/ssrn.3624022
DO - 10.2139/ssrn.3624022
M3 - Working paper
T3 - CEBI Working Paper Series
BT - Bailing out the Kids: New Evidence on Informal Insurance from one Billion Bank Transfers
ER -
ID: 248805414