Labor risk sharing
Name
939917722-MIT.pdf
Description
Full printable version
Size
1.27 MB
Format
Adobe PDF
Checksum (MD5)
be683e99b479cb865c3b36cfeb9dfdd0
Author(s)
Manuelli, Lucas
Advisor(s)
Ivan Werning.
Date Issued
2015
Publisher
Massachusetts Institute of Technology
Abstract
In this paper we aim to test the extent of labor risk sharing exists in thai village economies. Specifically we test the null hypothesis of full risk sharing at the village level. We outline a simple planner's problem that motivates our empirical specification. Our empirical specification consists of two equations, a labor supply equation that determines how many hours you work conditional on participating in the labor market, and a selection equation which determines the probability of working positive hours. Our empirical specification allows for fixed effects that correspond to different Pareto weights for the agents. Our dataset, an unusually long panel survey spanning over 160 months conducted in 16 villages in Thailand, allows us to deal with these fixed effects. Our results lead us to reject the null of full risk sharing since non-labor income has a significant negative effect on participation. In most specifications it also has a significant but small negative effect on hours worked conditional on participation. In light of these results we reject the null of full risk sharing.
Description
Thesis: S.M., Massachusetts Institute of Technology, Department of Economics, 2015.
Cataloged from PDF version of thesis.
Includes bibliographical references (page 16).
Subjects
Economics.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
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