In this paper we use the enhanced consumption data in the Panel Survey of Income Dynamics (PSID) from 2005-2017 to … explore the transmission of income shocks to consumption. We build on the nonlinear quantile framework introduced in Arellano …, Blundell and Bonhomme (2017). Our focus is on the estimation of consumption responses to persistent nonlinear income shocks in …

This paper describes the transmission of income inequality into consumption inequality and in so doing investigates the … degree of insurance to income shocks. It combines panel data on income from the PSID with consumption data from repeated CEX … evidence against full insurance for transitory income shocks except among low income households. Tax and welfare benefits are …