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Consumption inequality and family labor supply

Luigi Pistaferri (), Richard Blundell () and Itay Saporta-Eksten
Authors registered in the RePEc Author Service: Itay Saporta Eksten ()

No 1656, Working Paper Series from European Central Bank

Abstract: In this paper we examine the link between wage inequality and consumption inequality using a life cycle model that incorporates household consumption and family labour supply decisions. We derive analytical expressions based on approximations for the dynamics of consumption, hours, and earnings of two earners in the presence of correlated wage shocks, non-separability and asset accumulation decisions. We show how the model can be estimated and identified using panel data for hours, earnings, assets and consumption. We focus on the importance of family labour supply as an insurance mechanism to wage shocks and find strong evidence of smoothing of male JEL Classification: D11, D12, D31, D91

Keywords: consumption; earnings; inequality; labor supply (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dem, nep-lab and nep-ltv
Date: 2014-03
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Related works:
Journal Article: Consumption Inequality and Family Labor Supply (2016) Downloads
Working Paper: Consumption inequality and family labor supply (2014)
Working Paper: Consumption Inequality and Family Labor Supply (2012) Downloads
Working Paper: Consumption Inequality and Family Labor Supply (2012) Downloads
Working Paper: Consumption Inequality and Family Labor Supply (2012) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20141656

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