Consumption insurance and education: A puzzle?

Claudio Campanale ()

No 69, Working papers from Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino

Abstract: Households appear to smooth consumption in the face of income shocks much more than implied by life-cycle versions of the standard incomplete market model under reference calibrations. In the current paper we uncover a related puzzle: households with different educational levels show similar insurance against permanent shocks in the model while in the data empirically estimated by Blundell et al. (2008) college educated households seem to smooth consumption much more than high school educated households.

Keywords: Precautionary savings; Consumption insurance coefficients; Life-cycle; Education (search for similar items in EconPapers)
JEL-codes: E21 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2020-09
New Economics Papers: this item is included in nep-dge, nep-edu and nep-mac
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