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http://hdl.handle.net/10419/35071
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| Title: | | Risk sharing and commuting among US federal states  |
| Authors: | | Jüßen, Falko |
| Issue Date: | | 2008 |
| Series/Report no.: | | IZA Discussion Papers 3374 |
| Abstract: | | Financial markets provide imperfect insurance of labor income risk. However, workers can partly insure against labor market risk by commuting to adjacent regions. Since commuters own wage claims to output produced in adjacent regions, the business cycle in the neighborhood becomes a relevant risk factor at the regional level. In our empirical analysis for US states, we show this effect to be important. State-specific consumption comoves with business cycle shocks that hit adjacent states, in particular if a state is integrated by commuter flows. This labor market perspective on regional risk sharing complements previous studies that investigated risk sharing through financial markets. |
| Subjects: | | Risk sharing consumption smoothing commuting labor market risk |
| JEL: | | E21 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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