Partial insurance in Japan

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 i...

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Bibliographic Details
Published inJapanese economic review (Oxford, England) Vol. 72; no. 2; pp. 299 - 328
Main Author Kubota, Kohei
Format Journal Article
LanguageEnglish
Published Singapore Springer Singapore 01.04.2021
Springer Nature B.V
Subjects
Consumers
Consumption
Development Economics
Econometrics
Economic History
Economics
Economics and Finance
Income inequality
Insurance
Macroeconomics/Monetary Economics//Financial Economics
Microeconomics
Consumption
D12
E21
Insurance
D13
D91
Income shocks
Inequality
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Summary: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.
ISSN:1352-4739
1468-5876
DOI:10.1007/s42973-019-00034-7