Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75623
Authors: 
Bentolila, Samuel
Ichino, Andrea
Year of Publication: 
2000
Series/Report no.: 
CESifo Working Paper 372
Abstract: 
In this paper we analyze the relationship between unemployment and consumption. We study this relationship with panel data on households in five countries: Spain and Italy (the South), and Germany, Britain, and the US (the North). Our empirical results indicate that an increase in the duration of unemployment spells of male household heads is associated with smaller consumption losses in Spanish and Italian households. We discuss this finding in the light of different market and institutional frameworks. Given that the coverage and generosity of social welfare institutions are both higher in the North, and that credit and insurance markets are also more developed in the North than in the South, existing theories of consumption indicate that in the South consumption should fall more than in the North when the male household head becomes unemployed. This and other evidence supports the hypothesis that extended family networks, which appear to be stronger near the Mediterranean, provide a fundamental source of insurance against unemployment in southern Europe.
Subjects: 
Consumption
savings
unemployment
Document Type: 
Working Paper

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