A Continuous Model of Income Insurance
Assar Lindbeck and
No 756, Seminar Papers from Stockholm University, Institute for International Economic Studies
We develop a simple yet realistic model of income insurance, where the individual’s ability and willingness to work is treated as a continuous variable. In this framework, income insurance not only provides income smoothing, it also relieves the individual from particularly burdensome work. As a result, the individual adjusts his labor supply in a continuous fashion to the implicit tax wedge of the insurance system. Moral hazard, in the sense that an individual receives insurance benefits without actually being fully qualified, also becomes a matter of degree. Moreover, our continuous framework makes it easy to analyze both the role of administrative rejection of claims, and the role of social norms, for the utilization of insurance.
Keywords: Moral hazard; disability insurance; work absence; administrative rejection; asymmetric information; social norms (search for similar items in EconPapers)
JEL-codes: G22 H53 I38 J21 (search for similar items in EconPapers)
Pages: 39 pages
New Economics Papers: this item is included in nep-cta, nep-ias and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Journal Article: A continuous model of income insurance (2013)
Working Paper: A Continuous Model of Income Insurance (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hhs:iiessp:0756
Access Statistics for this paper
More papers in Seminar Papers from Stockholm University, Institute for International Economic Studies Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Hanna Christiansson ().