ONLINE Seminar in Makroökonomik - Bailing out the Kids: New Evidence on Informal Insurance from one Billion Bank Transfers
Wann
Montag, 18. Januar 2021
12 bis 13:15 Uhr
Wo
online
Veranstaltet von
Lehrstuhl für Außenwirtschaftstheorie und Politische Ökonomie (A. Di Nola)
Vortragende Person/Vortragende Personen:
Niels Johannesen (Københavns Universitet)
Bailing out the Kids: New Evidence on Informal Insurance from one Billion Bank Transfers
mit Asger Lau Andersen und Adam Sheridan
Abstract
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.