Recent Trends in Resource Sharing among the Poor

Motivated in part by the dramatic changes in the United States economy and public assistance policies, many researchers have examined the changes in the resources of the low-income population over the last two decades, with particular attention paid to income from earnings and public assistance programs. One source of income that has received comparatively little attention is income from private transfers. However, private transfers may be a key source of support for low-income individuals, especially for those who have had little attachment to the labor force or who have experienced reductions in public assistance. In this paper, we provide a conceptual discussion of private transfers drawing on several related literatures and provide new empirical evidence regarding the significance of private of transfers as a source income. We 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, and shared living arrangements are a common mechanism for providing assistance. This paper was prepared for the National Poverty Center project, “Working and Poor: How Economic and Policy Changes are Affecting Low-Wage Workers.” We are grateful for useful advice from Rebecca Blank, Sheldon Danziger, Robert Schoeni, and participants at the preliminary conference in Ann Arbor, MI. Both authors gratefully acknowledge financial support. Haider from the National Institute for Child Health and Development (R03 HD42084-01) and McGarry from the National Institute On Aging (R29 AG14110-05).