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Consumption insurance and education: A puzzle?

Author

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  • Claudio Campanale

    (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)

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.

Suggested Citation

  • Claudio Campanale, 2020. "Consumption insurance and education: A puzzle?," Working papers 069, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    • Handle: RePEc:tur:wpapnw:069
    as

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    File URL: https://www.bemservizi.unito.it/repec/tur/wpapnw/m69.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Precautionary savings; Consumption insurance coefficients; Life-cycle; Education;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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