Private Interhousehold Transfers: What Happens to Sender Households' Human Capital Investment?

This is an updated version of ANU Working Paper in Economics and Econometrics 576.

23 Pages Posted: 9 Jul 2012 Last revised: 24 Aug 2018

See all articles by Yuji Tamura

Yuji Tamura

Department of Accounting, Data Analytics, Economics and Finance, La Trobe University; ANU Centre for Economic Policy Research, Australian National University

Date Written: August 22, 2018

Abstract

I examine household resource reallocation when financial transfers are sent to other households located elsewhere. The literature has so far focused on the impact of private transfers on the recipients, but not on the senders. In order to handle the endogeneity of transfers, I use the 1997-98 coupling of El Niño and the Southern Oscillation (ENSO) that caused historic agricultural drought in Vietnam. I find that outward transfers by parents reduced the sender households' expenditures on the education of each of their children. The finding implies informal risk sharing could have a negative long-run effect on young members of assisting households.

Keywords: private financial transfer, human capital investment, natural disaster, Vietnam Living Standards Survey

JEL Classification: D10, D64, I22, J13, O15

Suggested Citation

Tamura, Yuji, Private Interhousehold Transfers: What Happens to Sender Households' Human Capital Investment? (August 22, 2018). This is an updated version of ANU Working Paper in Economics and Econometrics 576., Available at SSRN: https://ssrn.com/abstract=2102875 or http://dx.doi.org/10.2139/ssrn.2102875

Yuji Tamura (Contact Author)

Department of Accounting, Data Analytics, Economics and Finance, La Trobe University ( email )

Melbourne, VIC 3086
Australia

HOME PAGE: http://www.latrobe.edu.au/accounting-data-analytics-economics-and-finance

ANU Centre for Economic Policy Research, Australian National University

Canberra, ACT 2600
Australia

HOME PAGE: http://rse.anu.edu.au/research/centre-economic-policy-research

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