Human capital risk, contract enforcement, and the macro economy
By: Tom Krebs, Moritz Kuhn, Mark L. J. Wright
Contributors: Kuhn, Moritz, 1944-; Wright, Mark L. J.; National Bureau of Economic Research
Series: NBER working paper series -- working paper 17714; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 17714.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "We develop a macroeconomic model with physical and human capital, human capital risk, and limited contract enforcement.  We show analytically that young (high-return) households are the most exposed to human capital risk and are also the least insured.  We document this risk-insurance pattern in data on life-insurance drawn from the Survey of Consumer Finance.  A calibrated version of the model can quantitatively account for the life-cycle variation of insurance observed in the US data and implies welfare costs of under-insurance for young households that are equivalent to a 4 percent reduction in lifetime consumption.  A policy reform that makes consumer bankruptcy more costly leads to a substantial increase in the volume of credit and insurance"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 2/28/2012.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.