Autore
Lo Prete, Anna

Titolo
Sharing Risk Within and Across Countries: The Role of Labor Market Institutions
Periodico
Università degli studi di Torino. Dip. Di Economia e Statistica Cognetti de Martiis. Working paper series
Anno: 2013 - Volume: 5 - Fascicolo: 28 - Pagina iniziale: 1 - Pagina finale: 24

This paper studies the effect of labor market institutions on within- and cross-country risk-sharing using a model of international trade in risky assets modified to include a subset of agents, labor-owners, who do not access financial markets, and employment security provisions. Labor market institutions, by promoting within-country risk-shifting arrangements between agents with or without access to financial markets, reduce the fluctuations of non-tradable labor incomes and amplify the fluctuations of capital incomes. Capital flows become more volatile across countries, and if the configuration of labor markets differs across countries, capital-owners bear the burden of systematic undiversifiable world aggregate uncertainty.



Testo completo: http://www.est.unito.it/do/home.pl/Download?doc=/allegati/wp2013dip/wp_28_2013.pdf

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