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Risk-Sharing between and within Families
Fumio Hayashi
Joseph Altonji
Laurence Kotlikoff
Abstract
This paper uses the Panel Study of Income Dynamics to test whether risk-sharing is complete between or within American families. The tests accommodate a wide variety in the configuration and availability of family data. The test results reject inter- as well as intra-family full risk-sharing even assuming that leisure is endogenous or that leisure and consumption are nonseparable.
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