Social Insurance and Risks and Insurance Over the Life Cycle for Singles & Couples

Published: 2017
Project ID: UM17-01


This project aims at estimating a model including single and married people over the life cycle in which single people meet partners and experience labor-productivity shocks, medical-costs shocks during retirement, and life-span risk. Married people also experience divorce risk. Households self-insure by saving and by choosing their labor supply. We explicitly model means-tested transfer programs, Social Security and pension payments with survival and spousal benefits, differential tax treatment of married and single people, and the progressivity of the tax system. We study how social insurance programs affect both couples and singles. This project makes important contributions to the policy evaluation literature by modeling both the risks and insurance provided by marriage, which in turn is affected by the legal provisions attached to marriage. We conduct policy experiments using our framework to study the interactions of many forms of social insurance.