How Much Consumption Insurance in Bewley Models with Endogenous Family Labor Supply? /
Wu, Chunzan.
How Much Consumption Insurance in Bewley Models with Endogenous Family Labor Supply? / Chunzan Wu, Dirk Krueger. - Cambridge, Mass. National Bureau of Economic Research 2018. - 1 online resource: illustrations (black and white); - NBER working paper series no. w24472 . - Working Paper Series (National Bureau of Economic Research) no. w24472. .
March 2018.
We show that a calibrated life-cycle two-earner household model with endogenous labor supply can rationalize the extent of consumption insurance against shocks to male and female wages, as estimated empirically by Blundell, Pistaferri and Saporta-Eksten (2016) in U.S. data. With additively separable preferences, 43% of male and 23% of female permanent wage shocks pass through to consumption, compared to the empirical estimates of 34% and 20%. With non-separable preferences the model predicts more consumption insurance, with pass-through rates of 29% and 16%. Most of the consumption insurance against permanent male wage shocks is provided through the labor supply response of the female earner.
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Mode of access: World Wide Web.
How Much Consumption Insurance in Bewley Models with Endogenous Family Labor Supply? / Chunzan Wu, Dirk Krueger. - Cambridge, Mass. National Bureau of Economic Research 2018. - 1 online resource: illustrations (black and white); - NBER working paper series no. w24472 . - Working Paper Series (National Bureau of Economic Research) no. w24472. .
March 2018.
We show that a calibrated life-cycle two-earner household model with endogenous labor supply can rationalize the extent of consumption insurance against shocks to male and female wages, as estimated empirically by Blundell, Pistaferri and Saporta-Eksten (2016) in U.S. data. With additively separable preferences, 43% of male and 23% of female permanent wage shocks pass through to consumption, compared to the empirical estimates of 34% and 20%. With non-separable preferences the model predicts more consumption insurance, with pass-through rates of 29% and 16%. Most of the consumption insurance against permanent male wage shocks is provided through the labor supply response of the female earner.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.