We develop a new approach to the decomposition of income risk within a non- stationary model of intertemporal choice. The approach allows for changes in in- come risk over the life cycle and across the business cycle, allowing for mixtures of persistent and transitory components in the dynamic...

This paper analyses the trade-off between the incentive effects of increased uncertainty and the welfare benefits of risk-sharing in the design of optimal tax schedules. We use numerical methods to characterise the tax schedule and to give comparative static results of changing risk aversion,...

Using new data from the Understanding Society: COVID 19 survey collected in April 2020, we show how the aggregate shock caused by the pandemic affects individuals across the distribution. The survey collects data from existing members of the Under-standing Society panel survey who have been...