affect the expected remaining lifetime, the health expenses, and the income. In order to hedge the health expense effect of a …

realistic feature of our model is that the labor income of the wage earner is unspanned. We document that the combination of … unspanned labor income and the stickiness of insurance decisions reduces the insurance demand significantly. This is because an … income shock induces the need to reduce the insurance coverage, since premia become less affordable. Since such a reduction …

the zero-borrowing constraint is a lot weaker. More surprisingly, when I introduce idiosyncratic labor income risk in an … economy without a zero-borrowing constraint, the equity premium increases by 50 percent, even though the income shocks are …