Do Multigenerational Living Arrangements Affect Household Income Inequality? Evidence from Malaysia

Shahina Amin, University of Northern Iowa
Julie DaVanzo, RAND

Mutigenerational coresidence is quite common in developing countries, but little is known about how it affects the distribution of household income. Although a number of studies have investigated whether wives' earnings affect family income inequality, we know of no studies that have looked at the effect of the earnings of other adults on household income inequality. Using data from the first and second Malaysian Family Life Surveys, we assess how the earnings of other adult members affect household income inequality and how changes over time in the extent of multi-generational coresidence have affected changes in the distribution of income. We find that in both 1976 and 1988 the earnings of other adults helped equalize the distribution of household income in Peninsular Malaysia. The presence of other adults living in households declined significantly between 1976 and 1988. As a result, the equalizing effect of other adults' earnings on household income inequality also decreased significantly between 1976 and 1988.