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Mixed Blessings: Extended Family and Economic Security

For many economic risks, such as housing instability and lost earnings due to cutbacks in hours or sickness, neither government programs nor private insurance offer much help. In these cases, those who have unexpected financial needs can sometimes turn to their extended family. According to the SERPI, however, not everyone can turn to their extended family - and families can create risks as well as offer help.

On the positive side: People who are confident that their extended family will help them out if they have housing or income needs are far more secure than other respondents. For example, people who say that could borrow $5,000 or more from their extended family were half as likely to report being very worried or extremely anxious about their economic security as those who could not borrow at all.

Yet family help is not always reliable. About a quarter of all Americans report having no confidence that their family will assist them with housing problems or inadequate income. Nearly half (45%) anticipate being able to borrow nothing at all from their extended family or friends.

So families can help but don't always. That's even more clear when we recognize that the flip-side of getting help from one's extended family is giving help to one's extended family. It's not at all unusual for extended family members to have urgent needs for monetary assistance, according to the SERPI: 30 percent of Americans reported providing substantial financial assistance to their extended family between March 2008 and September 2009. Those who had were about 50 percent more likely to worry or feel anxious about economic insecurity compared to those who had not.

Is the glass half full or half empty? Probably half full. Strong family networks are an important source of economic security. But policy makers-and ordinary Americans-shouldn't forget that family is a mixed blessing: a potential source of economic insecurity as well as a potential protection against it.