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with recursive utility, as well as health-dependent income and mortality risk. Our estimates of the deep parameters … highlight the importance of health capital, mortality risk control, convex health and mortality adjustment costs and binding …
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This paper studies the life cycle consumption-investment-insurance problem of a family. The wage earner faces the risk of a health shock that significantly increases his probability of dying. The family can buy term life insurance with realistic features. In particular, the available contracts...
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