ECO 731 Labor Economics I

Professor James P. Ziliak MW: 3:00pm-4:15pm Gatton 233 Fall 2016

Office: Gatton Suite 234 Office Hours: MW 4:30pm-5:30pm Office Phone: 257-6902 E-mail: [email protected] Web Page: http://sites.google.com/site/jamesziliak/

Course Objectives

This course is the first of a two-term sequence on labor economics. The emphasis in this term is on the supply of labor and on the quality of labor. In the theory of labor supply emphasis will be placed on deriving structural utility parameters that are useful in labor-market policies toward taxes and social policy. For the quality of labor a model of human capital will be derived, which will then be linked into issues surrounding the distribution of earnings including the returns to schooling and experience, poverty, and income inequality and volatility. Throughout the course we will discuss in detail recent methods in the econometric evaluation of programs. The modeling techniques acquired in this course should prepare the student to pursue advanced research in empirical economics.

Course Requirements

There will be (empirical) homework projects (80%), and a referee report (20%).

Reading Requirements

The key required readings for the course are listed below. Within each subsection I highlight important readings that lectures will also draw from. Moreover, an attached appendix provides a more extensive reading list. For those with no previous course in labor economics I also recommend that you pick up an undergraduate labor text by Borjas, or Ehrenberg and Smith.

Labor Supply:

Keane, Michael. 2011. “Labor Supply and Taxes: A Survey,” Journal of Economic Literature 49:4(pp. 961-1016; 1025-1031).

Program Evaluation and Labor Econometrics:

Blundell, Richard and Monica Costa Dias. 2009. “Alternative Approaches to Evaluation in Empirical Microeconomics.” Journal of Human Resources, 44(3): 565-640.

Kniesner, Thomas J., and James P. Ziliak. 2014. “Panel Econometrics of Labor Market Outcomes.” In The Oxford Handbook of Panel Data, B. Baltagi (ed.), Oxford, UK: Oxford University Press, 585-609.

Human Capital:

Heckman, James J., Lance Lochner, and Petra Todd. 2006. “Earnings Functions, Rates of Return, and Treatment effects: The Mincer Equation and Beyond.” Handbook of Economics of Education, Vol 1, E. Hanushek and F. Welch (eds), Amsterdam: Elsevier, pp. 307-326;364-370.

Course Outline

1. Background: History, Concepts, Trends, and Measurement in Labor Economics

Aguiar, Mark, Erik Hurst, and Loukas Karabarbounis. 2012. “Recent Developments in the Economics of Time Use.” Annual Review of Economics.

Boyer, George, and Robert Smith. 2001. “The Development of the Neoclassical Tradition in Labor Economics.” Industrial and Labor Relations Review 54:2, 199-223.

Bollinger, Christopher R. and Barry T. Hirsch. 2006. “Match Bias from Earnings Imputation in the Current Population Survey: The Case of Imperfect Matching.” Journal of Labor Economics 24: 483-519. Bound, John, Charles Brown, and Nancy Mathiowetz. 2001. “Measurement Error in Survey Data.” In E. E. Leamer and J. J. Heckman (eds.), Handbook of Econometrics, Vol. 5, Amsterdam: North Holland: 3705-3843. Gottschalk, Peter, and Robert Moffitt. 2009. “The Rising Instability of U.S. Earnings.” Journal of Economic Perspectives 23(4): 3-24. Hokayem, Charles, Christopher Bollinger, and James P. Ziliak. 2015. “The Role of CPS Nonresponse on the Level and Trend in Poverty.” Journal of the American Statistical Association 110(511): 935-945 Kaplan, Greg, and Sam Schulhofer-Wohl. 2012. “Interstate Migration Has Fallen Less Than You Think: Consequences of Hot Deck Imputation in the Current Population Survey.” Demography 49: 1061-1074.

Wasserstein, Ronald L., and Nicole A. Lazar. 2016. “The ASA’s Statement on P-values: Context, Process, and Purpose.” The American Statistician, DOI: 10.1080/00031305.2016.1154108 .

Ziliak, James P. 2006. “Understanding Poverty Rates and Gaps: Concepts, Trends, and Challenges.” Foundations and Trends in Microeconomics 1: 127–199. Ziliak, James P. 2015. “Income, Program Participation, Poverty, and Financial Vulnerability: Research and Data Needs.” Journal of Economic and Social Measurement 40(1-4): 27-68.

II. The Supply of Labor

A. Static Labor Supply

Blundell, Richard and Thomas MaCurdy. 1998. “Labour Supply: A Review of Alternative Approaches.” Institute for Fiscal Studies W98/18. Sec 1–3; 4.0–4.2, 4.4–4.4.1

Moffitt, Robert. 2002. “Welfare Programs and Labor Supply.” NBER Working Paper 9168.

Mroz, Thomas A. (1987). "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," Econometrica 55:4, pp. 765-799.

B. Life-Cycle Labor Supply

Blundell, Richard and Thomas MaCurdy. 1998. “Labour Supply: A Review of Alternative Approaches.” Institute for Fiscal Studies W98/18. Sec 4.2–4.3, 4.4.2–4.5

Ziliak, James P. and Thomas J. Kniesner. 2005. “The Effect of Income Taxation on Consumption and Labor Supply.” Journal of Labor Economics, 23(4): 769–796.

MaCurdy, Thomas E. (1981). "An Empirical Model of Labor Supply in a Life-Cycle Setting," Journal of Political Economy 89:6, 1059-1085.

III. Econometrics of Program Evaluation

Blundell, Richard and Thomas MaCurdy. 1998. “Labour Supply: A Review of Alternative Approaches.” Institute for Fiscal Studies W98/18. Sec 5

Deaton, Angus. 2010. “Instruments, Randomization, and Learning about Development” Journal of Economic Literature 48(2): 424–455. (especially pp. 424-432).

Heckman, James. 2010. “Building Bridges Between Structural and Program Evaluation Approaches to Evaluating Policy” Journal of Economic Literature 48(2): 356–398. (especially pp. 356-369).

Lee, David, and Thomas Lemieux. 2010. “Regression Discontinuity Designs in Economics” Journal of Economic Literature 48(2): 281–355. (especially pp. 356-369).

Moffitt, Robert. 2005. “Remarks on the Analysis of Causal Relationships in Population Research.” Demography 42(1): 91–108.

IV. Human Capital

Card, David. 2001. “Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems.” Econometrica 69:5, 1127–1160.

Polochek, Solomon. 2007. “Earnings over the Lifecycle: The Mincer Earnings Function and its Applications.” Foundations and Trends in Microeconomics, Vol 4, No 3. (especially Sections I-VI)

V. Poverty, Inequality, Mobility, and Social Policy

Aizer, Anna, and Janet Currie. 2014. “The Intergenerational Transmission of Inequality: Maternal Disadvantage and Health at Birth.” Science 344(6186): 856-861.

Attanasio, Orazio, and Luigi Pistaferri. 2016. “Consumption Inequality.” Journal of Economic Perspectives, 30(2): 1-27.

Autor, David, Lawrence Katz, Melissa Kearney. 2008. “Trends in U.S. Wage Inequality: Revising the Revisionists.” Review of Economics and Statistics, 90(2): 300-323.

Autor,David, David Dorn, and Gordon Hanson. 2013. “The China Syndrome: Local Labor Market Effects of Import Competition in the United States,” American Economic Review, 103(6): 2121-2168.

Bitler, Marianne, and Hilary Hoynes. 2010. “The State of the Safety Net in the Post-Welfare Reform Era.” Brookings Papers on Economic Activity

Blundell, Richard, Luigi Pistaferri, and Itay Saporta-Eksten. 2016. “Consumption Inequality and Family Labor Supply.” American Economic Review, 106(2): 387-435.

Burkhauser, Richard V., Shuaizhang Feng, Stephen P. Jenkins, and Jeff Larrimore. 2012. “Recent Trends in Top Income Shares in the USA: Reconciling Estimates from March CPS and IRS Tax Return Data.” Review of Economics and Statistics 94: 371-388.

Card, David, and John DiNardo. 2002. “Skill-Biased Technological Change and Rise in Wage Inequality: Some Problems and Puzzles,” Journal of Labor Economics 20(4):733–783.

Chetty, Raj, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez. 2014. “Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States.” Quarterly Journal of Economics.

Dahl, Gordon, and Lance Lochner. 2012. “The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit,” American Economic Review 102(5): 1927-1956.

Gottschalk, Peter, and Robert Moffitt. 2009. “The Rising Instability of U.S. Earnings” Journal of Economic Perspectives, 23(4): 3–24.

Hoynes, Hilary, Diane Schanzenbach, and Douglas Almond. 2014. “Long Run Impacts of Childhood Access to the Safety Net.” American Economic Review.

Kniesner, Thomas J., and James P. Ziliak. 2002. “Tax Reform and Automatic Stabilization,” The American Economic Review 92(3): 590–612.

Lee, Chul-In, and Gary Solon. 2006. “Trends in Intergenerational Income Mobility.” NBER Working Paper #12007.

Lemieux, Thomas. 2006. “Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?” American Economic Review 96(3): 461–498.

Neal, Derek, and Amrin Rick. 2014. “The Prison Boom & Lack of Black Progress after Smith & Welch.” Department of Economics, University of Chicago.

Neumark, David, and William Wascher. 2007. “Minimum Wages and Employment.” Foundations and Trends in Microeconomics, Vol 3, No 1-2, 1-182.

Piketty, Thomas, and Emmanuel Saez. 2003. “Income Inequality in the United States, 1913-1998.” Quarterly Journal of Economics 118(1): 1-39.

Solon, Gary. 2013. “Theoretical Models of Inequality Transmission across Multiple Generations.” Stanford Center on Poverty and Inequality.

Appendix: Selected Additional Readings

A. Static Model of Labor Supply

Angrist, Joshua and William N. Evans, “Children and Their Parents’ Labor Supply: Evidence from Exogenous Variation in Family Size,” AER 88 (June 1998) 450-477.

Berndt, Ernst R. (1990). The Practice of Econometrics: Classic and Contemporary, Chapter 11, Reading, MA: Addison-Wesley Publishing Co.

Borjas, George. 2000. Labor Economics, 2nd Edition, New York: McGraw-Hill, Chapter 2.

Borjas, George J. (1980). "The Relationship Between Wages and Weekly Hours of Work: The Role of Division Bias," Journal of Human Resources 15:3, 409-423.

Bound, John, Charles Brown, Greg Duncan, and Willard Rogers (1990). "Measurement Error in Cross-sectional and Longitudinal Labor Market Surveys: Validation Study Evidence," Panel Data and Labour Market Studies, J. Hartog, G. Ridder, and J. Theeuwes (eds.), Amsterdam: North Holland.

Browning, Martin and Pierre Andre Chiappori (1998). “Efficient Intra-Household Allocations: A General Characterization and Empirical Tests,” Econometrica 66:6, 1241-1278.

Deaton and Muellbauer (1980). Economics and Consumer Behavior, Cambridge: Cambridge University Press.

Hall, Robert E. (1973). "Wages, Income, and Hours of Work in the U.S. Labor Force," in Income Maintenance and Labor Supply, G. Cain and H. Watts (eds.), Chicago: Markham Press.

Heckman, James J. (1974). “Shadow Prices, Market Wages, and Labor Supply,” Econometrica, 42, 679- 694.

Johnson, W.R. and J. Skinner (1986). "Labor Supply and Marital Separation," The American Economic Review 76:3, 455-469.

Killingsworth, Mark (1983). Labor Supply, Cambridge U.K.: Cambridge Univ. Press.

Kniesner, Thomas J. (1976). "An Indirect Test of Complementarity in a Family Labor Supply Model," Econometrica 44:4, pp. 651-669.

Kooreman, Peter and Arie Kapteyn (1990). “On the Empirical Implementation of Some Game Theoretic Models of Household Labor Supply,” Journal of Human Resources 25:4, 584-598.

Lazear, Edward and Robert Michael (1998). Allocation of Income Within the Household, Chicago: University of Chicago Press.

Lundberg, S. (1988). "Labor Supply of Husbands and Wives: A Simultaneous Equations Approach," Review of Economics and Statistics 70:2, 224-235.

Lundberg, Shelly, Robert Pollak, and Terence Wales (1997). “Do Husbands and Wives Pool Their Resources?,” Journal of Human Resources 32:3, 463-480.

Manser, Marilyn and M. Brown. 1981. “Marriage and Household Decision-Making: A Bargaining Analysis.” International Economic Review 21:31–44.

McElroy, Marjorie and M.J. Horney. 1981. “Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand,” International Economic Review 22:333–349.

Pencavel, John (1986). "Labor Supply of Men", Handbook of Labor Economics, O. Ashenfelter and R. Layard (eds.), Amsterdam: North Holland.

Stern, Nicholas (1986). "On the Specification of Labour Supply Functions," in Unemployment, Search and Labour Supply, R. Blundell and I. Walker (eds.), Cambridge: Cambridge University Press.

Zabel, Jeffrey E. (1993). "The Relationship between Hours of Work and Labor Force Participation in Four Models of Labor Supply Behavior," Journal of Labor Economics 11:2, pp. 387-416. (JSTOR)

B. Program Evaluation and Incentive Effects of Income Taxes and Income Transfers

Angrist, Joshua and Alan Krueger. 1999. “Empirical Strategies in Labor Economics,” in O. Ashenfelter and D. Card (eds.), Handbook of Labor Economics, Vol 3A, Amsterdam: North Holland.

Auerbach, Alan J. (1985). "The Theory of Excess Burden and Optimal Taxation," in A. J. Auerbach and M. Feldstein (eds.), Handbook of Public Economics, vol. 1, Amsterdam: North Holland.

Blundell, Richard and Monica Costa Dias. 2000. “Evaluation Methods for Non-Experimental Data.” Fiscal Studies 21(4): 427–468. (Ziliak)

Blundell, R., A. Duncan, and C. Meghir (1998). “Estimating Labor Supply Responses Using Tax Reforms,” Econometrica 66:4, 827–862. (Ziliak)

Burtless, Gary and Jerry Hausman (1978). "The Effect of Taxation on Labor Supply: Evaluating the Gary Negative Income Tax Experiment," Journal of Political Economy 86:6, 1103-1130.

Diamond, Peter and Daniel McFadden (1974). "Some Uses of the Expenditure Function in Public Finance," Journal of Public Economics 3, 3-21.

Hausman, Jerry (1981a). "Labor Supply," How Taxes Affect Economic Behavior, H. Aaron and J. Pechman (eds.), Washington, D.C.: Brookings Institution.

Hausman, Jerry (1981c). "Exact Consumer's Surplus and Deadweight Loss," American Economic Review 71:4, 662-676.

Hausman, Jerry and Paul Ruud (1984). "Family Labor Supply with Taxes," American Economic Review Papers and Proceedings 74:2, 242-248.

Heckman, James J., R. LaLonde, and J. Smith. 1999. “The Economics and Econometrics of Active Labor Market Programs,” in O. Ashenfelter and D. Card (eds.), Handbook of Labor Economics, Vol 3A, Amsterdam: North Holland.

Heckman, James J., and Salvador Navarro-Lozano. 2004. “Using Matching, Instrumental Variables, and Control Functions to Estimate Economic Choice Models.” Review of Economics and Statistics, 86(1): 30– 57.

Heckman, James J. and Richard Robb, Jr. 1985. "Alternative Methods for Evaluating the Impact of Interventions" in J. Heckman and B. Singer (eds.) Longitudinal Analysis of Labor Market Data.

Heckman, James J., Justin Tobias, and Edward Vytlacil. 2001. “Four Parameters of Interest in the Evaluation of Social Programs.” Southern Journal of Economics 68(2): 210–223.

Hoynes, Hilary W. 1996. “Welfare Transfers in a Tw-Parent Families: Labor Supply and Welfare Participation under AFDC-UP.” Econometrica 64(2): 295–332.

King, Mervyn (1983). "Welfare Analysis of Tax Reforms Using Household Data," Journal of Public Economics 21, 183-214.

MaCurdy, Thomas, David Green, and Harry Paarsch (1990). "Assessing Empirical Approaches for Analyzing Taxes and Labor Supply," Journal of Human Resources 25, 415-489.

Manski, Charles F. 1995. Identification Problems in the Social Sciences, Cambridge: Harvard University Press.

Manski, Charles F. and I. Garfinkel. 1992. Evaluating Welfare and Training Programs, Cambridge: Harvard University Press.

Moffitt, Robert (1990). "The Econometrics of Kinked Budget Constraints," Journal of Economic Perspectives 4:2, 119-140.

Moffitt, Robert (1992). "Incentive Effects of the U.S. Welfare System," Journal of Economic Literature 30:1, pp 1–62.

Moffitt, Robert. 2002. “Welfare Programs and Labor Supply.” NBER Working Paper 9168.

Triest, Robert K. (1990). "The Effect of Income Taxation on Labor Supply in the United States," Journal of Human Resources 25:3, 491-516.

Wooldridge, Jeffrey. 2002. Econometric Analysis of Cross Section and Panel Data, Cambridge: MIT Press.

C. Life-Cycle Labor Supply

Altonji, Joseph G. (1986). "Intertemporal Substitution in Labor Supply: Evidence from Micro Data," Journal of Political Economy 94:3, S176-S215.

Altug, S. and R.A. Miller (1990). "Household Choice in Equilibrium," Econometrica 58:3, 543-570.

Blomquist, N. Soren (1985). "Labor Supply in a Two-Period Model: The Effect of a Nonlinear Progressive Income Tax," Review of Economic Studies 70, 515-524.

Blundell, Richard and Ian Walker (1986). "A Life-Cycle Consistent Empirical Model of Family Labour Supply Using Cross-section Data," Review of Economic Studies 80, 539-588.

Blundell, Richard, Luigi Pistaferri, and Ian Preston. 2008. “Consumption Inequality and Partial Insurance.” American Economic Review, 98(5) 1887-1921.

Bover, Olympia (1991). "Relaxing Intertemporal Separability: A Rational Habits Model of Labour Supply Estimated from Panel Data," Journal of Labor Economics 9, 85-100.

Browning, Martin, Angus Deaton, and Margaret Irish (1985). "A Profitable Approach to Labor Supply and Commodity Demands over the Life-Cycle," Econometrica 53:3, pp. 503-543.

Browning, Martin and Costas Meghir (1991). "The Effects of Male and Female Labor Supply on Commodity Demands," Econometrica 59:4, pp. 925-951.

Eichenbaum, Martin, Lars Hansen, and Kenneth Singleton (1988). "A Time Series Analysis of Representative Agent Models of Consumption and Leisure Choice under Uncertainty," Quarterly Journal of Economics 103:1, 51-78.

Heckman, James J. (1974a). “Life-Cycle Consumption and Labor Supply: An Explanation of the Relationship Between Income and Consumption over the Life Cycle,” American Economic Review, 64, 188-194. (JSTOR)

Heckman, James and Thomas MaCurdy (1980). "A Life-Cycle Model of Female Labour Supply," Review of Economic Studies 47:1, 47-74.

Hotz, V. Joseph, Finn E. Kydland, and Guilerme L. Sedlacek (1988). "Intertemporal Preferences and Labor Supply," Econometrica 56:2, 335-360.

Kniesner, Thomas J. and James P. Ziliak. 2008. “Evidence of Tax Induced Individual Behavioral Responses.” Fundamental Tax Reform: Issue, Choices, and Implications, John W. Diamond and George R. Zodrow, eds., Cambridge MA: MIT Press, pp. 375–411.

MaCurdy, Thomas E. (1983). "A Simple Scheme for Estimating an Intertemporal Model of Labor Supply and Consumption in the Presence of Taxes and Uncertainty," International Economic Review 24:2, 265- 289.

MaCurdy, Thomas E. (1985). "Interpreting Empirical Models of Labor Supply in an Intertemporal Framework with Uncertainty," Longitudinal Analysis of Labor Market Data, J. Heckman and B. Singer (eds.), Cambridge, U.K.: Cambridge Univ. Press.

MaCurdy, Thomas. 1999. “An essay on the life cycle: Characterizing intertemporal behavior with uncertainty, human capital, taxes, durables, imperfect capital markets, and non-separable preferences.” Research in Economics, 5–46. Section 1–3.

Ziliak, James P. and Thomas J. Kniesner (1998). "A Sensitivity Analysis of Life-Cycle Labor Supply Parameter Estimates to Sample Attrition Bias," Journal of Human Resources 33:2, 507-530.

Ziliak, James P. and Thomas J. Kniesner (1999). "Estimating Life-Cycle Labor-Supply Tax Effects," Journal of Political Economy 107:2, 326-359.

Ziliak, James P. and Thomas J. Kniesner. 2005. “The Effect of Income Taxation on Consumption and Labor Supply.” Journal of Labor Economics, 23(4): 769–796.

D. Human Capital and the Structure of Wages

Angrist, Joshua and Alan Krueger. 1991. “Does Compulsory School Attendance Affect Schooling and Earnings?” Quarterly Journal of Economics 106:4, 979–1014.

Ashenfelter, Orley and Alan Krueger, "Estimates of the Economic Return to Schooling from a New Sample of Twins, American Economic Review, 84(5), December 1994, 1157-1173.

Gary S. Becker. 1993. Human Capital, 3rd ed., University of Chicago Press.

Ben-Porath, Yoram. 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy 75, 352-365.

Bound, John, David Jaeger, and Regina Baker. 1995. “Problems with Instrumental Variables Estimation when the Correlation between the Instruments and the Endogenous Explanatory Variable is Weak.” Journal of the American Statistical Association 90:430, 443–450.

Bound, John and George Johnson. 1992. "Changes in the Structure of Wages in the 1980s: An Evaluation of Alternative Explanations," AER 82: 371-392.

Card, David. 1999. “The Causal Effect of Education on Earnings.” in O. Ashenfelter and D. Card (eds.) Handbook of Labor Economics, Vol 3A, Amsterdam: North Holland, Ch. 30.

Card, David, and John DiNardo. 2002. “Skill-Biased Technological Change and Rise in Wage Inequality: Some Problems and Puzzles,” Journal of Labor Economics 20(4):733–783.

DiNardo, John, Nicole M. Fortin, and Thomas Lemieux. 1996. “Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semi-parametric Approach,” Econometrica 64: 1001-1044.

Heckman, James J. (1976). “A Life Cycle Model of Earnings, Learning, and Consumption,” Journal of Political Economy, 84, S11-44.

Juhn, Chinhui and Kevin M. Murphy 1997. “Wage Inequality and Family Labor Supply,” Journal of Labor Economics 15:1, 72-97. (JSTOR)

Juhn, Chinhui, Kevin M. Murphy, and Brooks Pierce. 1993. "Wage Inequality and the Rise in the Returns to Skill," JPE 101: 410-442.

Katz, Lawrence and David Autor. 1999. “Changes in the Wage Structure and Earnings Inequality.” In Handbook of Labor Economics 3A, O. Ashenfelter and D. Card (eds.), Amsterdam: North Holland,1463– 1555.

Katz, Lawrence F. and Kevin M. Murphy. 1992. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," QJE 107: 35-78.

Mincer, Jacob. 1974. Schooling, Experience, and Earnings, Columbia University Press, 1974.

Polachek, Solomon and W. Stanlet Siebert. 1993. The Economics of Earnings, Cambridge, UK: Cambridge University Press.

Solon, Gary. 1999. “Intergenerational Mobility in the Labor Market.” In O. Ashenfelter and D. Card (eds.), Handbook of Labor Economics, Vol 3A, Amsterdam: North Holland, Ch. 29. (Ziliak)

Shaw, Kathryn (1989). "Life Cycle Labor Supply with Human Capital Accumulation," International Economic Review 30:2, 431-457. (JSTOR)

Willis, Robert. 1986. "Wage Determinants: A Survey and Reinterpretation of Human Capital Earnings Functions," in O. Ashenfelter and R. Layard (eds.), Handbook of Labor Economics, Vol. 1, Chapter 10.

E. Life-Cycle Consumption

Attanasio, Orazio. 1998. “Consumption Demand.” NBER WP 6466. (NBER Web)

Attanasio, Orazio, and Guglielmo Weber (Forthcoming). “Consumption and Saving: Models of Intertemporal Allocation and their Implications for Public Policy.” Journal of Economic Literature

Blundell, Richard, Martin Browning, and Costas Meghir (1994). "Consumer Demand and the Life-Cycle Allocation of Household Expenditures," Review of Economic Studies, 61, 57-80.

Blundell, Richard and Ian Preston (1998). “Consumption Inequality and Income Uncertainty,” Quarterly Journal of Economics 113:2, 603-640.

Browning, Martin, Angus Deaton, and Margaret Irish (1985). "A Profitable Approach to Labor Supply and Commodity Demands over the Life-Cycle," Econometrica 53:3, pp. 503-543.

Cochrane, J. (1991). A Simple Test of Consumption Insurance,” Journal of Political Economy 99:5, 957-976. (JSTOR)

Deaton, Angus (1992). Understanding Consumption, Oxford: Clarendon Press.

Deaton, A. (1997). The Analysis of Household Surveys: A Microeconometric Approach to Development Policy, Baltimore: Johns Hopkins University Press.

Gournichas, Pierre-Olivier and Jonathan Parker. 2002. “Consumption over the Life Cycle.” Econometrica 70:1, 47–90.

Gruber, J. (1997). “The Consumption Smoothing Benefits of Unemployment Insurance,” The American Economic Review 87:1, 192-205.

Hall, R.E. (1978). "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy 86:6, 971-987.

Hall, R.E.(1988)."Intertemporal Substitution in Consumption,"Journal of Political Economy 6(2):339357.

Hayashi, F. (1985). "The Permanent Income Hypothesis and Consumption Durability: Analysis Based on Japanese Panel Data," Quarterly Journal of Economics 100:4, 1083-1113.

Hayashi, F., J. Altonji, and L. Kotlikoff (1996). “Risk Sharing Between and Within Families,” Econometrica 64:2, 261-294.

Mankiw, N. Gregory, Julio Rotemberg, and Lawrence Summers (1985). "Intertemporal Substitution in Macroeconomics," Quarterly Journal of Economics 100:1, 225-252.

Runkle, D.E. (1991). "Liquidity Constraints and the Permanent-Income Hypothesis: Evidence from Panel Data," Journal of Monetary Economics 27, 73-98.

Townsend, R. (1994). “Risk and Insurance in Village India,” Econometrica 62:3, 539-592.

Zeldes, S. P. (1989). "Consumption and Liquidity Constraints: An Empirical Investigation," Journal of Political Economy 97:2, 305-346.

Ziliak, James P. (1998). "Does the Choice of Consumption Measure Matter? An application to the permanent-income hypothesis," Journal of Monetary Economics 41:1, 201-216.