The Great Recession and Private Financial Transfers

Aaron Gottlieb, Princeton University
Irwin Garfinkel, Columbia University
Natasha Pilkauskas, Columbia University

From December 2007 until June 2009, the United States experienced the Great Recession, its worst financial crisis since the Great Depression. To deal with economic hardships or unexpected expenses, families may receive or provide financial transfers. We use data from the Fragile Families and Child Wellbeing Study (FF) to examine patterns of private transfer behavior over the first 9 years of a child’s life, including who gives and/receives, how much money is transferred, and differences by relationship status. We also investigate whether giving and receiving money is related to the unemployment rate and whether patterns of private financial transfers changed in the Great Recession. We find that families with children give 150 dollars more than they receive. An increase in the unemployment rate increases the probability that families receive a private transfer, but decreases the dollar amount that families give to others.