MOVE-UAB and Barcelona GSE
Campus de Bellaterra-UAB Edifici B
ES-08193 Cerdanyola del Vallès
Institutional Affiliation: MOVE-UAB
NBER Working Papers and Publications
|May 2018||Asymmetric Business-Cycle Risk and Social Insurance|
with David Domeij, Fatih Guvenen, Rocio Madera: w24569
This paper studies the business-cycle variation in higher-order (labor) income risk—that is, risks that are captured by moments higher than the variance. We examine the extent to which such risks can be smoothed within households or with government social insurance and tax policies. We use panel data from three countries that differ in many aspects relevant for our analysis: the United States, Germany, and Sweden. Our analysis has three main results. First, using individual gross income, we document that skewness is procyclical and dispersion (variance) is flat and acyclical in Germany and Sweden, as was previously documented for the United States. The same patterns hold true for groups defined by education, gender, public- versus private-sector jobs, among others. Second, household-level ...