Spousal insurance around the world

• Department of Economics

Annika Bacher from BI Norwegian Business School will present her paper 'Spousal Insurance Around the World'

This is a study of intra-household insurance through spousal labour supply across 46 countries with widely varying income levels, using newly harmonised microdata from quarterly rotating-panel labour-force surveys.

Previous studies on high-income countries have shown rather small spousal employment adjustments in response to the main earners’ job loss, primarily due to crowding out effects through public or other margins of private insurance. Households in developing countries typically have fewer such insurance alternatives, theoretically increasing the need for spousal insurance. However, we do not find stronger spousal responses as we move along the development spectrum.

This pattern is robust to various definitions of spousal insurance and to extending the concept to all household members. These patterns have been interpreted through the lens of a life-cycle model with two-member households, frictional formal labour markets and self-employment, as well as endogenous human capital and asset accumulation.

Co-author: Kevin Donovan, Philipp Grübener, Lukas Nord, and Todd Schoellman