Marwa AlFakhri - Duke University

Out of Sight, but not Out of Mind: Information, Efficiency and the Extended Family

    Date:  09/30/2021 (Thu)

    Time:  3:30pm- 5:00pm

    Location:  This seminar will be held remotely via Zoom. (Please sign in to see the link.)

    Organizer:  Laura Satterfield

Meeting Schedule: (Not currently open for scheduling. Please contact the seminar organizer listed above.)

    All meetings will be held in the same location as the seminar unless otherwise noted.

    3:30pm - Seminar Presentation (3:30pm to 5:00pm)

    Additional Comments:  The United States is undergoing major demographic changes that are expected to strain social welfare including an increase in life expectancy and a rapidly growing aging population. While the family plays a significant role in supporting its members through retirement, decision-making and resource allocations within the extended family are relatively understudied due to lack of adequate data. In this project, I employ rich data from the Panel Study of Income Dynamics (PSID) and extend economic intra-household models and their empirical applications to examine resource allocations in the context of the extended family. I find that extended families do not allocate their resources efficiently, leaving potential welfare gains unrealized. I argue that one reason extended families may not be able to make the most of the resources available to them is imperfect information sharing. To demonstrate this point, I make novel use of survey data to document the prevalence of imperfect information in extended family networks and to empirically test whether imperfect information plays a role in determining efficiency of allocations. I find that families with better information sharing allocate resources efficiently, providing suggestive evidence that information imperfection may hinder efficient resource allocations in the family.