scholarly journals Learning Your Earning: Are Labor Income Shocks Really Very Persistent?

2006 ◽  
Author(s):  
Fatih Guvenen
Keyword(s):  
Labor Income ◽  
Income Shocks

scholarly journals Taxing Capital? Not a Bad Idea After All!

2009 ◽  
Vol 99 (1) ◽  
pp. 25-48 ◽  
Author(s):  
Juan Carlos Conesa ◽  
Sagiri Kitao ◽  
Dirk Krueger
Keyword(s):  
Income Tax ◽  
Labor Income ◽  
Income Shocks ◽  
Capital Income ◽  
Overlapping Generations Model ◽  
Cycle Structure ◽  
Tax Rate ◽  
Average Household Income ◽  
Optimal Capital

We quantitatively characterize the optimal capital and labor income tax in an overlapping generations model with idiosyncratic, uninsurable income shocks and permanent productivity differences of households. The optimal capital income tax rate is significantly positive at 36 percent. The optimal progressive labor income tax is, roughly, a flat tax of 23 percent with a deduction of $7,200 (relative to average household income of $42,000). The high optimal capital income tax is mainly driven by the life-cycle structure of the model, whereas the optimal progressivity of the labor income tax is attributable to the insurance and redistribution role of the tax system. (JEL E13, H21, H24, H25)

scholarly journals Child Labor, Income Shocks, and Access to Credit

2003 ◽  
Author(s):  
Kathleen Beegle ◽  
Rajeev H. Dehejia ◽  
Roberta Gatti
Keyword(s):  
Child Labor ◽  
Labor Income ◽  
Income Shocks ◽  
Access To Credit

scholarly journals Social Protection and Informality in Latin America during the COVID-19 Pandemic

2020 ◽  
Author(s):  
Matías Busso ◽  
Juanita Camacho ◽  
Julián Messina ◽  
Guadalupe Montenegro
Keyword(s):  
Latin American ◽  
Social Protection ◽  
Ad Hoc ◽  
Labor Income ◽  
Income Shocks ◽  
Assistance Programs ◽  
Informal Workers ◽  
Inability To Work ◽  
Social Protection Systems ◽  
Income Assistance

Latin American governments swiftly implemented income assistance programs to sustain families' livelihoods during COVID-19 stay-at-home orders. This paper analyzes the potential coverage and generosity of these measures and assesses the suitability of current safety nets to deal with unexpected negative income shocks in 10 Latin American countries. The expansion of pre-existing programs (most notably conditional cash transfers and non-contributory pensions) during the COVID-19 crisis was generally insufficient to compensate for the inability to work among the poorest segments of the population. When COVID-19 ad hoc programs are analyzed, the coverage and replacement rates of regular labor income among households in the first quintile of the country's labor income distribution increase substantially. Yet, these programs present substantial coverage challenges among families composed of fundamentally informal workers who are non-poor, but are at a high risk of poverty. These results highlight the limitations of the fragmented nature of social protection systems in the region.

scholarly journals Learning Your Earning: Are Labor Income Shocks Really Very Persistent?

2007 ◽  
Vol 97 (3) ◽  
pp. 687-712 ◽  
Author(s):  
Fatih Guvenen
Keyword(s):  
Life Cycle ◽  
Current Literature ◽  
Previous Literature ◽  
Labor Income ◽  
Income Shocks ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Consumption Data ◽  
Hip Process

The current literature offers two views on the nature of the labor income process. According to the first view, individuals are subject to very persistent income shocks while facing similar life-cycle income profiles (the RIP process, Thomas MaCurdy 1982). According to the alternative, individuals are subject to shocks with modest persistence while facing individual-specific profiles (the HIP process, Lee A. Lillard and Yoram A. Weiss 1979). In this paper we study the restrictions imposed by these two processes on consumption data—in the context of a life-cycle model—to distinguish between the two views. We find that the life-cycle model with a HIP process, which has not been studied in the previous literature, is consistent with several features of consumption data, whereas the model with a RIP process is consistent with some, but not with others. We conclude that the HIP model could be a credible contender to—and along some dimensions, a more coherent alternative than—the RIP model. (JEL D83, D91, E21, J31)

scholarly journals Social protection and informality in Latin America during the COVID-19 pandemic

PLoS ONE ◽  
2021 ◽  
Vol 16 (11) ◽  
pp. e0259050
Author(s):  
Matias Busso ◽  
Juanita Camacho ◽  
Julián Messina ◽  
Guadalupe Montenegro
Keyword(s):  
Latin American ◽  
Social Protection ◽  
Ad Hoc ◽  
Labor Income ◽  
Income Shocks ◽  
Assistance Programs ◽  
Informal Workers ◽  
Inability To Work ◽  
Social Protection Systems ◽  
Income Assistance

Latin American governments swiftly implemented income assistance programs to sustain families’ livelihoods during COVID-19 stay-at-home orders. This paper analyzes the potential coverage and generosity of these measures and assesses the suitability of current safety nets to deal with unexpected negative income shocks in 10 Latin American countries. The expansion of pre-existing programs (most notably conditional cash transfers and non-contributory pensions) during the COVID-19 crisis was generally insufficient to compensate for the inability to work among the poorest segments of the population. When COVID-19 ad hoc programs are analyzed, the coverage and replacement rates of regular labor income among households in the first quintile of the country’s labor income distribution increase substantially. Yet, these programs present substantial coverage challenges among families composed of fundamentally informal workers who are non-poor, but are at a high risk of poverty. These results highlight the limitations of the fragmented nature of social protection systems in the region.

scholarly journals Consumer Loan Response to Permanent Labor Income Shocks: Evidence from a Major Minimum Wage Increase

2017 ◽  
Author(s):  
Ibrahim Guney ◽  
Yavuz Hacihasanoglu ◽  
Semih Tumen
Keyword(s):  
Minimum Wage ◽  
Labor Income ◽  
Wage Increase ◽  
Income Shocks ◽  
Minimum Wage Increase

scholarly journals Limited Insurance within the Household: Evidence from a Field Experiment in Kenya

2012 ◽  
Vol 4 (4) ◽  
pp. 140-164 ◽  
Author(s):  
Jonathan Robinson
Keyword(s):  
Developing Countries ◽  
Field Experiment ◽  
Risk Sharing ◽  
Private Consumption ◽  
Married Couples ◽  
Labor Income ◽  
Income Shocks ◽  
Lifetime Income

In developing countries, unexpected income shocks are common but informal insurance is typically incomplete. An important question is therefore whether risk-sharing within the household is effective. This paper presents results from a field experiment with 142 married couples in Kenya in which individuals were given random income shocks. Even though the shocks were small relative to lifetime income, men increase private consumption when they receive the shock but not when their wives do, a rejection of efficiency. Such behavior is not specific to the experiment—both spouses spend more on themselves when their labor income is higher. (JEL D14, D81, G22, O12, O16)

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