Blundell, Richard; Pistaferri, Luigi; Saporta-Eksten, Itay - 2014
In this paper we examine the link between wage inequality and consumption inequality using a life cycle model that … the dynamics of consumption, hours, and earnings of two earners in the presence of correlated wage shocks, non …, earnings, assets and consumption. We focus on the importance of family labour supply as an insurance mechanism to wage shocks …