Data and Code for: Job Displacement Insurance and (the Lack of) Consumption-Smoothing
- Gerard, François (Queen Mary University)
- Naritomi, Joana (London School of Economics)
- International Growth Centre, the National Science Foundation (NSF grant SES-1757105), and STICERD
AbstractWe 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.
2010-01-01 / 2014-12-31Time Period: Fri Jan 01 00:00:00 EST 2010--Wed Dec 31 00:00:00 EST 2014 (Main Data Window)
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Update Metadata: 2021-02-19 | Issue Number: 1 | Registration Date: 2021-02-19