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dc.contributor.authorORTIGUEIRA, Salvador
dc.contributor.authorSIASSI, Nawid
dc.date.accessioned2010-11-24T12:52:33Z
dc.date.available2010-11-24T12:52:33Z
dc.date.issued2010
dc.identifier.issn1725-6704
dc.identifier.urihttp://hdl.handle.net/1814/15014
dc.description.abstractWhile it is recognized that the family is primarily an institution for risk sharing, little is known about the quantitative effects of this informal source of insurance on savings and labor supply. In this paper, we present a model where workers (females and males) are subject to idiosyncratic employment risk and where capital markets are incomplete. A household is formed by a female and a male, who make collective decisions on consumption, savings and labor supplies. In a calibrated version of our model, we find that precautionary savings are only 55% of those generated by a similar economy that lacks access to insurance from the family. We also find that intra-household risk sharing has its largest impact among wealthpoor households. While the wealth-rich use mainly savings to smooth consumption across unemployment spells, wealth-poor households rely on spousal labor supply. For instance, in the group of households with wealth less than two months worth of income, average hours worked by wives of unemployed husbands are 8% higher than those worked by wives of employed husbands. This response in wives’ hours makes up 9% of lost family income. We also find crowding out effects of public unemployment insurance that are comparable to those estimated from the data.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.publisherEuropean University Institute
dc.relation.ispartofseriesEUI ECOen
dc.relation.ispartofseries2010/36en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectIntra-household risk sharingen
dc.subjectCollective household modelen
dc.subjectIdiosyncratic unemployment risken
dc.subjectIncomplete marketsen
dc.subjectPrecautionary motiveen
dc.subjectD13en
dc.subjectD91en
dc.subjectE21en
dc.titleHow important is intra-household risk sharing for savings and labor supply?en
dc.typeWorking Paperen
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