Idiosyncratic Risk in the United States and Sweden: Is There a Role for Government Insurance?

Martin Flodén and Jesper Lindé

Review of Economic Dynamics, 2001, vol. 4, issue 2, 406-437

Abstract: We examine the effects of government redistribution schemes in an economy where agents are subject to uninsurable, individual specific productivity risk. In particular, we consider the trade-off between positive insurance effects and negative distortions on labor supply and saving. We parameterize the model by estimating productivity processes on Swedish and U.S. data. The estimation results show that agents in the United States are subject to more idiosyncratic risk than agents in Sweden. Although distortions are significant, the welfare benefits of government redistribution and insurance systems can be substantial. (Copyright: Elsevier)

Keywords: idiosyncratic risk; inequality; social insurance; redistribution; distributions (search for similar items in EconPapers)
JEL-codes: E20 H21 (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (145)

Downloads: (external link)
http://dx.doi.org/10.1006/redy.2000.0121 Full text (application/pdf)
Access to full texts is restricted to ScienceDirect subscribers and ScienceDirect institutional members. See http://www.sciencedirect.com/ for details.

Related works:
Working Paper: Idiosyncratic Risk in the U.S. and Sweden: Is there a Role for Government Insurance? (1998)
Working Paper: Idiosyncratic Risk in the U.S. and Sweden: Is there a Role for Government Insurance? (1998)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:issued:v:4:y:2001:i:2:p:406-437

Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/

DOI: 10.1006/redy.2000.0121

Access Statistics for this article

Review of Economic Dynamics is currently edited by Loukas Karabarbounis

More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().