Mitigating Poverty through the Formation of Extended Family Households: Race and Ethnic Differences

In times of hardship, moving in with family is one strategy for alleviating economic deprivation and uncertainty. The ability of the family to buffer against poverty may vary by the resources available to and the economic needs of individuals. I assess how the formation of extended-family households is associated with a move into or out of poverty and how this association varies by race and ethnicity, since economic resources and norms around extended-family households differ. Using longitudinal data that span four years, I estimate linear fixed effects regression models to assess how changes in living arrangements are related to changes in poverty. I find that moving into an extended-family household reduces poverty, especially for the joining family unit. Most of this poverty reduction occurs through a family safety net, with a non-poor family taking in poor family units.