Labor and Financial Market Interactions: The Case of Labor Income Risk and Car Insurance in the UK 1969-95

Arbeitspapier

Microeconomic theory predicts that under certain regularity conditions higher idiosyncratic risk increases the propensity to insure against independent marketable risks. We apply these predictions to the specific case of labor income risk and car insurance using data from the UK. The main empirical results are: ? higher labor income risk induces a higher demand for car insurance. ? the effects of increases in labor income risk after 1979 seem to be more than offset by a more liberal financial market. ? the effects seem to be important on the macro level in the 70s whereas they become negligible in the 80s and 90s.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 240

Classification and Topics

• Classification: Wirtschaft ; Consumer Economics: Empirical Analysis ; Criteria for Decision-Making under Risk and Uncertainty ; Insurance; Insurance Companies; Actuarial Studies ; Wage Level and Structure; Wage Differentials
• Subject: Labor income risk ; insurance ; imperfect markets ; precautionary motive ; United Kingdom ; Lohn ; Einkommen ; Risiko ; Kraftfahrtversicherung ; Nachfrage ; Konsumentenverhalten ; Versicherungsökonomik ; Großbritannien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Koeniger, Winfried
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/21088
• Last update: 10.03.2025, 11:41 AM CET