What do we know about extended families and kinship networks? What gaps in our knowledge most need to be filled? How can we best organize current work and identify priorities for future research? These questions are important for several reasons: households in developing countries depend on friends and relatives for their livelihood and sometimes their survival; help exchanged within extended families and kin networks affects the distribution of economic well-being, and this private assistance and exchange can interact with public income redistribution. Yet despite rapid recent progress there remain significant deficiencies in our understanding of the economics of extended families. Researchers confront a large and sometimes bewildering array of findings. We review and assess this literature by starting with an emphasis on standard economic concerns, most notably the possible interaction between government-provided social insurance and private kinship networks. Our review of the evidence suggests the specter of complete “crowding out,” whereby introduction or expansion of public transfers merely supplants private transfers, is exceedingly remote, though not impossible. However, numerous studies do suggest partial—but nonetheless substantial—crowding out, on the order of a 20-to-30-cent reduction in private transfers per dollar increase in public transfers. But the range of estimated effects is exceedingly wide, with many studies suggesting little private transfer response at all.
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