Partial insurance in Japan
Kohei Kubota ()
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Kohei Kubota: Chuo University
The Japanese Economic Review, 2021, vol. 72, issue 2, No 7, 299-328
Abstract This study estimates the degree of the transmission of income shocks to consumption using the partial insurance model of Blundell et al. (2008) and data taken from the Japanese Panel Survey of Consumers that cover the recessions in the 2000s. The analysis finds that the transmission of permanent income shocks to consumption was insured by half, whereas transitory income shocks were almost fully insured. Meanwhile, permanent income shocks statistically did not change over this period, whereas transitory income shocks did. These results suggest that the partial insurance model does not contradict observational changes in consumption and income inequality.
Keywords: Income shocks; Consumption; Insurance; Inequality (search for similar items in EconPapers)
JEL-codes: D12 D13 D91 E21 (search for similar items in EconPapers)
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