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Consumption insurance and education: A puzzle?

Author

Listed:
  • Claudio Campanale

    (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)

Abstract

Households appear to smooth consumption in the face of income shocks much more than implied by life-cycle versions of the standard incomplete market model under reference calibrations. In the current paper we uncover a related puzzle: households with different educational levels show similar insurance against permanent shocks in the model while in the data empirically estimated by Blundell et al. (2008) college educated households seem to smooth consumption much more than high school educated households.

Suggested Citation

  • Claudio Campanale, 2020. "Consumption insurance and education: A puzzle?," Working papers 069, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    • Handle: RePEc:tur:wpapnw:069
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    File URL: https://www.bemservizi.unito.it/repec/tur/wpapnw/m69.pdf
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    References listed on IDEAS

    as
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    10. Campanale, Claudio & Sartarelli, Marcello, 2024. "Life-cycle wealth accumulation and consumption insurance," Journal of Macroeconomics, Elsevier, vol. 79(C).
    11. Krueger, Dirk & Wu, Chunzan, 2018. "How Much Consumption Insurance in Bewley Models with Endogenous Family Labor Supply?," CEPR Discussion Papers 12828, C.E.P.R. Discussion Papers.
    12. Richard Blundell & Luigi Pistaferri & Itay Saporta-Eksten, 2016. "Consumption Inequality and Family Labor Supply," American Economic Review, American Economic Association, vol. 106(2), pages 387-435, February.
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    More about this item

    Keywords

    Precautionary savings; Consumption insurance coefficients; Life-cycle; Education;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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