Intrahousehold Transfers

AN INTRAHOUSEHOLD transfer is one in which items are passed among members of a household, either formally or informally. It includes money paid by working adults to grandparents to offset childcare costs, rent or lodging fees, allowances made to children and young people, and contributions to family income arising from child labor.

Government transfers such as those intended for child benefit are also a form of intrahousehold transfer, because they are necessarily paid to someone who is not the intended recipient and it would be very difficult to try to ensure that the benefit is effectively transferred to the one it is intended to reach. In a harmonious and rational household, transfers will take place to ensure that all members receive according to their needs. However, households are not always such happy places and, in any case, information asymmetries dictate that not all household members will be aware of the most equitable distribution of resources.

There are also, of course, many examples of abusive or predatory household members who cause transfers of resources to themselves that are wholly unjustified by genuine need. Generally, then, it would be wrong to treat a household as having a unitary set of goals in the way that economics supposes that individuals have. In many societies, work and access to household resources are both affected by gender; most commonly, women are restricted wholly or in part to work inside the house, while men work outside. This may not be the most efficient arrangement of resources and, in any case, there is sufficient evidence to believe that men and women have different priorities in terms of household resource allocation. Since, globally, women receive less pay than men for the same work, men will generally have more power in the household to determine the extent to which intrahousehold transfers take place.

Resolving the extent to which this takes place is likely to require negotiation and debate and, again, this may not be the most efficient use of time. One result of these arrangements is that development efforts are often focused on providing resources to women to overcome such inefficient distributions. Examples include the Grameen Bank and similar microfinancing institutions. In many parts of the developed world, too, domestic work is frequently considered to be part of a woman's domain and to be properly valued at a very low rate. This perception further skews the distribution of resources in terms of rewards within the household.

Gender and age factors also affect the distribution of inheritance resources to children. Some societies frequently favor boys over girls with respect to inheritance and, also the older is favored compared to the younger. In such cases, the less privileged child may face a much lower standard of living, while, if property is distributed equally among a large number of children, all may face the same fate.

In the wake of the 1997 Asian Financial Crisis, many of the poorest people who suffered job losses were those who had migrated from rural to urban areas for factory work or similar jobs. Once jobless, they returned to their rural households and were supported by intrahousehold transfers, to which they could contribute some labor. Most such people became underemployed rather than unemployed as a result.

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