scholarly journals Optimal Social Assistance and Unemployment Insurance in a Life-Cycle Model of Family Labor Supply and Savings

2015 ◽  
Author(s):  
Peter Haan ◽  
Victoria L. Prowse
Keyword(s):  
Life Cycle ◽  
Labor Supply ◽  
Unemployment Insurance ◽  
Social Assistance ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Family Labor

scholarly journals Consumption Inequality and Family Labor Supply

2016 ◽  
Vol 106 (2) ◽  
pp. 387-435 ◽  
Author(s):  
Richard Blundell ◽  
Luigi Pistaferri ◽  
Itay Saporta-Eksten
Keyword(s):  
Life Cycle ◽  
Panel Data ◽  
Labor Supply ◽  
Asset Accumulation ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Family Labor ◽  
Insurance Mechanism ◽  
Analytical Expressions ◽  
Wage Shocks

We examine the link between wage and consumption inequality using a life-cycle model incorporating consumption and family labor supply decisions. We derive analytical expressions for the dynamics of consumption, hours, and earnings of two earners in the presence of correlated wage shocks, nonseparability, progressive taxation, and asset accumulation. The model is estimated using panel data for hours, earnings, assets, and consumption. We focus on family labor supply as an insurance mechanism and find strong evidence of smoothing of permanent wage shocks. Once family labor supply, assets, and taxes are properly accounted for there is little evidence of additional insurance. (JEL D12, D14, D91, J22, J31)

Optimal Life Cycle Unemployment Insurance

2015 ◽  
Vol 105 (2) ◽  
pp. 816-859 ◽  
Author(s):  
Claudio Michelacci ◽  
Hernán Ruffo
Keyword(s):  
Human Capital ◽  
Life Cycle ◽  
Moral Hazard ◽  
Unemployment Insurance ◽  
Older Workers ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Welfare Gains ◽  
High Return ◽  
Unemployment Risk

We argue that US welfare would rise if unemployment insurance were increased for younger and decreased for older workers. This is because the young tend to lack the means to smooth consumption during unemployment and want jobs to accumulate high-return human capital. So unemployment insurance is most valuable to them, while moral hazard is mild. By calibrating a life cycle model with unemployment risk and endogenous search effort, we find that allowing unemployment replacement rates to decline with age yields sizeable welfare gains to US workers. (JEL D91, E24, J13, J64, J65)

Tax Incidence in a Life Cycle Model with Variable Labor Supply

1979 ◽  
Vol 93 (4) ◽  
pp. 705 ◽  
Author(s):  
Laurence J. Kotlikoff ◽  
Lawrence H. Summers
Keyword(s):  
Life Cycle ◽  
Labor Supply ◽  
Tax Incidence ◽  
Life Cycle Model ◽  
Cycle Model
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