households with children are under-insured against the risk that an adult member of the household dies. We develop a tractable … with the life insurance data, in equilibrium young households are borrowing constrained and under-insured against human … capital risk. A calibrated version of the model can quantitatively account for the life-cycle variation of life-insurance …

households with children are under-insured against the risk that an adult member of the household dies. We develop a tractable … due to the limited pledgeability of human capital. We show analytically that, consistent with the life insurance data, in … account for the life-cycle variation of life-insurance holdings, financial wealth, earnings, and consumption inequality …