Data and Code for: Job Displacement Insurance and (the Lack of) Consumption-Smoothing
Principal Investigator(s): View help for Principal Investigator(s) François Gerard, Queen Mary University; Joana Naritomi, London School of Economics
Version: View help for Version V1
| Name | File Type | Size | Last Modified |
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| TableA1 | 11/17/2020 05:55:AM | ||
| TableA2 | 11/17/2020 05:55:AM | ||
| TableA3 | 11/17/2020 05:55:AM | ||
| TableA4 | 11/17/2020 05:55:AM | ||
| TableC1 | 11/17/2020 05:55:AM | ||
| TableC2 | 11/17/2020 05:55:AM | ||
| TableC3 | 11/17/2020 05:55:AM | ||
| TableC4 | 11/17/2020 05:55:AM |
Project Description
Summary:
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We study the spending profile of workers who experience both a positive transitory income shock (lump-sum severance pay) and a negative permanent income shock (layoff). Using de-identified expenditure and employment data from Brazil, we show that workers increase spending at layoff by 35% despite experiencing a 14% long-term loss. We find high sensitivity of spending to cash-on-hand across consumption categories and for several sources of variation, including predictable income drops. A model with present-biased workers can rationalize our findings, and highlights the importance of the timing of benefit disbursement for the consumption-smoothing gains of job displacement insurance policies.
Scope of Project
JEL Classification:
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E21 Macroeconomics: Consumption; Saving; Wealth
E26 Informal Economy; Underground Economy
J65 Unemployment Insurance; Severance Pay; Plant Closings
E21 Macroeconomics: Consumption; Saving; Wealth
E26 Informal Economy; Underground Economy
J65 Unemployment Insurance; Severance Pay; Plant Closings
Geographic Coverage:
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Brazil
Data Type(s):
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program source code;
survey data
Methodology
Data Source:
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- Employment history and unemployment insurance data are from the Brazilian Ministry of Labor and Employment (MTE)
- Expenditure data was created based on de-identified receipt data from an Anonymous firm
- Household survey data is from the Brazilian Census Bureau (IBGE)
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