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

23 Pages Posted: 13 May 2019

See all articles by Mariacristina De Nardi

Mariacristina De Nardi

University College London, Economics Dpt.; Federal Reserve Bank of Chicago; National Bureau of Economic Research (NBER) - Public Economics

Giulio Fella

Queen Mary, University of London

Marike Knoef

Leiden University, Institute of Tax Law and Economics; Netspar

Gonzalo Paz-Pardo

University College London

Raun van Ooijen

University of Groningen

Multiple version iconThere are 2 versions of this paper

Date Written: May 2019

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.

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Suggested Citation

De Nardi, Mariacristina and Fella, Giulio and Knoef, Marike and Paz-Pardo, Gonzalo and van Ooijen, Raun, Family and Government Insurance: Wage, Earnings, and Income Risks in the Netherlands and the U.S (May 2019). NBER Working Paper No. w25832. Available at SSRN: https://ssrn.com/abstract=3387188

Mariacristina De Nardi (Contact Author)

University College London, Economics Dpt. ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Federal Reserve Bank of Chicago ( email )

Research Department
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Chicago, IL 60604
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HOME PAGE: http://www.nber.org/~denardim

National Bureau of Economic Research (NBER) - Public Economics ( email )

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HOME PAGE: http://www.nber.org/~denardim

Giulio Fella

Queen Mary, University of London ( email )

Mile End Road
London E1 4NS, London E1 4NS
United Kingdom

Marike Knoef

Leiden University, Institute of Tax Law and Economics ( email )

PO Box 9520
Leiden, 2300 RA
Netherlands

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Gonzalo Paz-Pardo

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

Raun Van Ooijen

University of Groningen ( email )

P.O. Box 800
9700 AH Groningen, Groningen 9700 AV
Netherlands

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