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Labour market institutions and household consumption insurance within OECD countries

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Abstract

This paper tests empirically whether the effect of idiosyncratic income shocks on aggregate consumption depends on institutional features of national labour markets. The results show that in a sample of 15 OECD countries institutional heterogeneity is a significant determinant of the response of household consumption to country-specific income shocks. This is consistent with the idea that institutionally-provided social insurance may help increase income stability when people differ in their ability to access financial markets and smooth consumption fluctuations.

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  • Lo Prete, Anna, 2015. "Labour market institutions and household consumption insurance within OECD countries," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201515, University of Turin.
    • Handle: RePEc:uto:dipeco:201515
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    Cited by:

    1. Giuseppe Bertola & Anna Lo Prete, 2015. "Reforms, Finance, and Current Accounts," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 469-488, August.
    2. Giuseppe Bertola & Anna Lo Prete,, 2023. "Financial Literacy and Risk Protection During the Covid-19 Pandemic," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202325, University of Turin.

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