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100			_aWu, Chunzan and Krueger, Dirk _926609
245			_aConsumption insurance against wage risk: Family labor supply and optimal progressive income taxation
260			_aAmerican Economic Journal: Macroeconomics
300			_a13(1), Jan, 2021: p.79-113
520			_aWe show that a calibrated life cycle two-earner household model with endogenous labor supply can rationalize the extent of consumption insurance against shocks to male and female wages, as estimated empirically by Blundell, Pistaferri, and Saporta-Eksten (2016) in US data. In the model, 35 percent of male and 18 percent of female permanent wage shocks pass through to consumption, compared to the empirical estimates of 32 percent and 19 percent. Most of the consumption insurance against permanent male wage shocks is provided through the presence and labor supply response of the female earner. Abstracting from this private intrahousehold income insurance mechanism strongly biases upward the welfare losses from idiosyncratic wage risk as well as the desired extent of public insurance through progressive income taxation. Relative to the standard one-earner life cycle model, the optimal degree of tax progressivity is significantly lower and the welfare gains from implementing the optimal system are cut roughly in half. – Reproduced
650			_aTaxation and Subsidies, Optimal Taxation, Personal Income,Nonbusiness taxes and subsidies,Inheritance and gift taxes, Economics of gender; Non-labor discrimination _926610
773			_aAmerican Economic Journal: Macroeconomics
906			_aTAXATION
942			_cAR