Template-type: ReDIF-Paper 1.0
Author-Name: Lo Prete, Anna
Author-Email: anna.loprete@unito.it
Author-Workplace-Name: University of Turin
Author-Workplace-Homepage: http://www.est.unito.it/
Title: Sharing Risk Within and Across Countries: The Role of Labor Market Institutions.
Abstract: 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. 
Length: 24 pages
Creation-Date: 2013-05
File-URL: http://www.est.unito.it/do/home.pl/Download?doc=/allegati/wp2013dip/wp_28_2013.pdf
File-Format: Application/PDF
Handle: RePEc:uto:dipeco:201328