Moving Back Home: Insurance against Labor Market Risk

Greg Kaplan

Journal of Political Economy, 2012, vol. 120, issue 3, 446 - 512

Abstract: This paper demonstrates that the option to move in and out of the parental home is a valuable insurance channel against labor market risk, which facilitates the pursuit of jobs with the potential for high earnings growth. Using monthly panel data, I document an empirical relationship among coresidence, individual labor market events, and subsequent earnings growth. I estimate the parameters of a dynamic game between youths and parents to show that the option to live at home can account for features of aggregate data for low-skilled young workers: small consumption responses to shocks, high labor elasticities, and low savings rates.

Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (144)

Downloads: (external link)
http://dx.doi.org/10.1086/666588 (application/pdf)
http://dx.doi.org/10.1086/666588 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: Moving back home: insurance against labor market risk (2010)
Working Paper: Moving back home: insurance against labor market risk (2010)
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:ucp:jpolec:doi:10.1086/666588

Access Statistics for this article

More articles in Journal of Political Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().