Full Citation

Title: Occupational Hazards and Social Insurance

Citation Type: Miscellaneous

Publication Year: 2014

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Abstract: Non-employment risk is a large portion of life-time income risk and the level of exposure is tied to occupation. As governments can affect the level of risk individual’s bear, we analyze social insurance (SI) in a general equilibrium model of occupational choice. SI provides welfare gains through two channels: (i) risk sharing, and (ii) reallocating labor into risky occupations. Reallocation improves productive efficiency and increases all workers’ welfare, even those without non-employment risk. However, the risk sharing channel can compromise efficiency gains. In a calibrated economy resembling the US, welfare gains from socially optimal SI are reduced by reallocation: the risk sharing provided leads to more labor in risky occupations than is productively efficient.

Url: https://pdfs.semanticscholar.org/d243/6e6f58fad95a728f56d8e801382be0f619b9.pdf

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Authors: Michaud, Amanda; Wiczer, David

Publisher: Indiana University

Data Collections: IPUMS USA

Topics: Aging and Retirement, Other

Countries: United States