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α: calibrated so average coauthorship-adjusted count equals average raw count
We report strong empirical support for the presence of self-interest-based risk sharing within extended families in the U.S. A standard model of self-interest-based risk sharing predicts that the share of current family income consumed by a child positively depends on that child׳s permanent income. It follows that parental transfers to children that are expected to earn more over the period of risk-sharing arrangements should exhibit less sensitivity to the recipient׳s income fluctuations. We test this distinguishing prediction of self-interest-based risk sharing by exploiting the variation of transfer receipts among siblings, observed over 17 years of longitudinal data spanned by the Health and Retirement Study.