Family and kinship ties in development: An economist's perspective

This paper examines the role o family and kinship ties in economic development. It analyzes the functions that families play in transmitting values to younger generations and in establishing social norms that have a profound impact on individual decisions involving fertility, labor force participation, investments in education and health. It also discusses the role of families as substitutes for markets, with particular reference to informal insurance and credit markets. A common theme in the paper is to highlight the “comparative advantage” that families or kin groups have in performing some of these roles, but also the potential inefficiencies that may result from their involvement.