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|Abstract:||This paper demonstrates that the option to move in and out of the parental home is a valuable insurance channel against labor market risk, which facilitates the pursuit of jobs with the potential for high earnings growth. Using monthly panel data, I document an empirical relationship among coresidence, individual labor market events, and subsequent earnings growth. I estimate the parameters of a dynamic game between youths and parents to show that the option to live at home can account for features of aggregate data for low-skilled young workers: small consumption responses to shocks, high labor elasticities, and low savings rates. © 2012 by The University of Chicago.|
|Citation:||Kaplan, G. (2012). Moving Back Home: Insurance against Labor Market Risk. Journal of Political Economy, 120 (3), 446 - 512. doi:10.1086/666588|
|Pages:||446 - 512|
|Type of Material:||Journal Article|
|Journal/Proceeding Title:||Journal of Political Economy|
|Version:||Final published version. Article is made available in OAR by the publisher's permission or policy.|
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