Change search
ReferencesLink to record
Permanent link

Direct link
Idiosyncratic Risk in the U.S. and Sweden: Is there a Role for Government Insurance?
Stockholm University, Faculty of Social Sciences, Institute for International Economic Studies.
Department of Economics, Stockholm School of Economics.
1998 (English)Report (Other academic)
Abstract [en]

We examine the effects of government redistribution schemes in an economy where agents are subject to uninsurable, individual specific productivity risk. In particular, we consider the trade-off between positive insurance effects and negative distortions on labor supply. We parametize the models by estimating productivity processes on Swedish and U.S. data. The estimation results show that agents in the U.S. are subject to more idiosyncratic risk than agents in Sweden. Distortions are significant but agents, particularly in the U.S., still like some government insruance. As a result of this exercise, we can construct Laffer curves for both countries. These peak when labor income tax rates are around 60 percent.

Place, publisher, year, edition, pages
Stockholm: IIES , 1998. , 36 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 654
Keyword [en]
Idiosyncratic risk, Inequality, Insurance, Redistribution, Laffer curve, Distributions
National Category
URN: urn:nbn:se:su:diva-41061OAI: diva2:328071
Available from: 2010-07-01 Created: 2010-07-01 Last updated: 2010-07-02Bibliographically approved

Open Access in DiVA

fulltext(382 kB)321 downloads
File information
File name FULLTEXT01.pdfFile size 382 kBChecksum SHA-512
Type fulltextMimetype application/pdf

By organisation
Institute for International Economic Studies

Search outside of DiVA

GoogleGoogle Scholar
Total: 321 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Total: 54 hits
ReferencesLink to record
Permanent link

Direct link