Consumption smoothing and the welfare consequences of social insurance in developing economies

• 成果类型: Article
• 署名作者: Chetty, Raj; Looney, Adam
• 署名单位: University of California System; University of California Berkeley; National Bureau of Economic Research
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2006.07.002
• 发表日期: 2006
• 页码: 2351-2356
• 关键词: risk; unemployment

摘要

Studies of risk in developing economies have focused on consumption fluctuations as a measure of the value of insurance. A common view in the literature is that the welfare costs of risk and benefits of social insurance are small if income shocks do not cause large consumption fluctuations. We present a simple model showing that this conclusion is incorrect if the consumption path is smooth because individuals are highly risk averse. Hence, social safety nets could be valuable in low-income economies even when consumption is not very sensitive to shocks. (c) 2006 Elsevier B.V. All rights reserved.