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Family and Government Insurance: Wage, Earnings, and Income Risks in the Netherlands and the U.S

Author

Listed:
  • Mariacristina De Nardi

    (UCL, Federal Reserve Bank of Chicago, CE)

  • Giulio Fella

    (Queen Mary, University of London)

  • Gonzalo Paz Pardo

    (University College London)

  • Marike Knoef

    (Leiden University, Netspar)

  • Raun Van Ooijen

    (University of Groningen)

Abstract

We document new facts on the distributions of male wages, male earnings, and household earnings and income (before and after taxes) in the Netherlands and the United States. We find that, in both countries, wages display rich dynamics, including substantial asymmetries and nonlinearities by age and previous earnings levels. Individual-level male wage and earnings risk is relatively high for younger and older people, and for those in the lower and upper parts of the income distribution. In the Netherlands, the behavior of hours and family labor supply have noticeable effects on earnings persistence and on the skewness and kurtosis of wage changes, but government transfers are a major source of insurance. Instead, the role of family insurance is much larger in the U.S. and also affects the standard deviation of wage changes, in addition to its skewness and kurtosis, and wage persistence. Family and government insurance reduce, but do not eliminate these non-linearities in household disposable income by age and previous earnings in both countries.

Suggested Citation

  • Mariacristina De Nardi & Giulio Fella & Gonzalo Paz Pardo & Marike Knoef & Raun Van Ooijen, 2019. "Family and Government Insurance: Wage, Earnings, and Income Risks in the Netherlands and the U.S," 2019 Meeting Papers 1033, Society for Economic Dynamics.
    • Handle: RePEc:red:sed019:1033
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    References listed on IDEAS

    as
    1. Mariacristina De Nardi & Giulio Fella & Gonzalo Paz-Pardo, 2020. "Nonlinear Household Earnings Dynamics, Self-Insurance, and Welfare," Journal of the European Economic Association, European Economic Association, vol. 18(2), pages 890-926.
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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