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Insuring uninsurable income

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  • Michiko Ogaku

Abstract

This paper presents a method to avoid the ominous prediction of the previous work: if insured incomes of infinitely lived individuals are unobservable, then efficient allocations lead to permanent welfare inequality between individuals and immiseration of society. The proposed mechanism (i) promises within-period full insurance by postponing risks ; (ii) it does not lead to social ranking among the same age groups; and (iii) it could be sustainable.

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  • Michiko Ogaku, 2022. "Insuring uninsurable income," Papers 2204.00347, arXiv.org, revised Feb 2024.
    • Handle: RePEc:arx:papers:2204.00347
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    References listed on IDEAS

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    1. Phelan, Christopher, 1998. "On the Long Run Implications of Repeated Moral Hazard," Journal of Economic Theory, Elsevier, vol. 79(2), pages 174-191, April.
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    4. Carrasco, Vinicius & Fuchs, William & Fukuda, Satoshi, 2019. "From equals to despots: The dynamics of repeated decision making in partnerships with private information," Journal of Economic Theory, Elsevier, vol. 182(C), pages 402-432.
    5. Christopher Phelan, 2006. "Opportunity and Social Mobility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(2), pages 487-504.
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