Family and government insurance: Wage, earnings, and income risks in the Netherlands and the U.S.—De Nardi 2020

We document risk in male wages, household earnings, and pre- and post-tax income in the Netherlands and the U.S. In both countries, earnings deviate from linearity and normality. Individual-level male wage and earnings risk is high at the beginning and end of the working life and for low- and high-income men. Hours drive earnings' negative skewness and high kurtosis. Despite no evidence of added-worker effects, spousal earnings reduce household income variability compared to male earnings. In the Netherlands, government transfers reduce income standard deviation, negative skewness, and kurtosis. Family insurance is more important in the U.S. than the Netherlands. Family and government insurance reduce household disposable income non-linearities by age and previous earnings in both countries.