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Partial insurance in Japan

Author

Listed:
  • Kohei Kubota

    (Chuo University)

Abstract

This study estimates the degree of the transmission of income shocks to consumption using the partial insurance model of Blundell et al. (2008) and data taken from the Japanese Panel Survey of Consumers that cover the recessions in the 2000s. The analysis finds that the transmission of permanent income shocks to consumption was insured by half, whereas transitory income shocks were almost fully insured. Meanwhile, permanent income shocks statistically did not change over this period, whereas transitory income shocks did. These results suggest that the partial insurance model does not contradict observational changes in consumption and income inequality.

Suggested Citation

  • Kohei Kubota, 2021. "Partial insurance in Japan," The Japanese Economic Review, Springer, vol. 72(2), pages 299-328, April.
    • Handle: RePEc:spr:jecrev:v:72:y:2021:i:2:d:10.1007_s42973-019-00034-7
    DOI: 10.1007/s42973-019-00034-7
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    References listed on IDEAS

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    1. Richard Blundell & Luigi Pistaferri & Itay Saporta-Eksten, 2018. "Children, Time Allocation, and Consumption Insurance," Journal of Political Economy, University of Chicago Press, vol. 126(S1), pages 73-115.
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    6. José Casado, 2011. "From income to consumption: measuring households partial insurance," Empirical Economics, Springer, vol. 40(2), pages 471-495, April.
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    Cited by:

    1. Da Zhao & Jingyuan Guo & Hong Zou & Ze Song, 2022. "From Price to Gain: The Evolution of Household Income Volatility and Consumption Insurance in Urban China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(6), pages 113-136, November.

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    More about this item

    Keywords

    Income shocks; Consumption; Insurance; Inequality;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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