The Role of the Family as an Informal Insurance Mechanism

Abstract

This dissertation examines the extent of different forms of informal insurance provided by both co-resident and non-co-resident family members. Primarily relying on the Panel Study of Income Dynamics, a unique, longitudinal survey dataset from the United States, this dissertation provides new insight on the importance and unique motives that may drive interactions between family members. These two essays investigate the different forms of assistance that the family uses in two different contexts: in response to unemployment and health conditions. The results in this paper provide new insight into the role that informal interactions can have on decisions and behavior. This research suggests new direction for future economic models dealing with the family, networks, risk, unemployment, health, and location decisions. The overarching theme is that decisions are made jointly across households, not just within a household.