Recent trends in resource sharing among the poor

This paper provides a conceptual discussion of private transfers drawing on several related literatures and provides new empirical evidence regarding the significance of private transfers as a source of income. It summarises the theoretical literature drawing on several well-developed models of resource sharing between and within households that provide important insights into possible motives. It also draws on the existing empirical literature to demonstrate clearly that individuals make substantial transfers and numerous modes of resource sharing are employed.

Recent work suggests that the probability and amount of cash transfers depend on the resources of both the potential donors and recipients and on the availability of public assistance programmes. However, few studies have examined simultaneously multiple modes of assistance, how transfers vary over time, or how transfers respond to the economic environment more generally.

The authors find that:

• private transfers are an important source of income for many less-skilled households
• the contribution of private transfers to total income has increased over time
• shared living arrangements are a common mechanism for providing assistance

The paper hypothesises that these changes in the contribution of private transfers may be due to changes in attitudes and social norms. [adapted from author]

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