in a model with non-durable and durable consumption. The stock of the durable is exposed to risk against which households …-durable consumption. Introducing labor income risk into the model does not necessarily increase the importance of market insurance if the … because agents can time-diversify their risk. Market insurance implies welfare gains of around .6% in terms of non …

in a model with non-durable and durable consumption. The stock of the durable is exposed to risk against which households …-durable consumption. Introducing labor income risk into the model does not necessarily increase the importance of market insurance if the … because agents can time-diversify their risk. Market insurance implies welfare gains of around .6% in terms of non …

This paper derives optimal employment contracts when workers are risk averse and there are employment and unemployment … risks. Without income insurance, consumption rises during employment and falls during unemployment. Optimal employment … contracts offer severance compensation and sometimes give notice before dismissal. Severance compensation smoothes consumption …

producing human capital. We also demonstrate that this attenuation effect tends to concentrate generational consumption risk … into an i.i.d. generational consumption shock. In other words, each generation bears all of the risk associated with their …

transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use CEX … repeated cross-section data on consumption and income to decompose idiosyncratic changes in income into predictable life … evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in …

transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use CEX … repeated cross-section data on consumption and income to decompose idiosyncratic changes in income into predictable lifecycle … evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in …

The existing literature suggests that when the saving decision of two-earner households under risk is analysed …, standard assumptions suffice for precautionary saving to exist under increases in risk of the first and second orders, but not …

Drawing on a model in which utility is derived from consumption and effort (labor supply), we ask how the deportation … of a number of undocumented migrants influences the decisions regarding labor supply, consumption, and savings of the …