Extended Families and Child Well-being
Whereas studies have established the intra-household distribution of resources affects allocation decisions, little is known about how these decisions are affected by the distribution of resources among co-resident and non co-resident extended family members. Drawing on theoretical models of collective decision-making, we use extremely rich data from Indonesia to establish that child health- and education-related human capital outcomes are affected by resources of extended family members who co-reside with the child and those who are not co-resident. Extended family members are not completely altruistic but their allocation decisions are apparently co-ordinated in a way that is consistent with Pareto efficiency.
Financial support from the National Institute of Child Health and Human Development and the Hewlett Foundation is gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.