Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73749
Authors: 
Year of Publication: 
2012
Series/Report no.: 
ifo Working Paper No. 148
Publisher: 
ifo Institute - Leibniz Institute for Economic Research at the University of Munich, Munich
Abstract: 
We examine whether income and unemployment risks are compensated by individual wages. Using a portfolio approach we show that the marginal income risk effect on wages is always positive whereas the marginal unemployment risk effect crucially depends on the income risk. The interaction effect between both risk measures is negative. Using administrative panel data from Germany we confirm the theoretically predicted signs for both risks and their interaction effect.
Subjects: 
Income risk
unemployment risk
interaction effect
wages
JEL: 
J30
J31
J64
Document Type: 
Working Paper

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