--956) test if risk sharing across households is complete in the sense that household consumption moves one-for-one with aggregate … consumption. In their studies the source of income risk is idiosyncratic, and agents can share risk across the entire economy …. Using a sample of households from the Panel Study on Income Dynamics (PSID), we explore whether households share the risk …

theory suggests that with increasing labor income risk, the reluctance of households to hold stocks increases. We propose to … measure income risk as the observed variation of household income over a five year period. We find that indeed higher income … risk reduces the propensity to invest in stocks. However, when controlling for household heterogeneity as well as …

We investigate the importance of aggregate and consumer-specific or idiosyncratic labour income risk for aggregate … consumption changes in the US over the period 1952-2001. Theoretically, the effect of labour income risk on consumption changes is … decomposed into an aggregate and into an idiosyncratic part. Empirically, aggregate risk is modelled through a GARCH process on …

This paper aims to fill the gaps in the analysis of risk‐sharing channels at the microlevel, both within and across … to quantify in a unified and consistent framework several risk‐sharing mechanisms that so far have been documented …/dissavings (40% and 47% in 2008-2010 and 2010-2012, respectively), and within‐household risk‐sharing (16% and 14%). Interestingly …