arXiv subjects

Alexandros Theloudis

Publications and source records attributed to Alexandros Theloudis.

4 recordsLinked to original sources

arXiv2026

Commitment and the dynamics of household labor supply: new tests and evidence from Europe

The ability of spouses to commit to future behavior has important implications for the allocation of resources between them and over time. Using a lifecycle collective model for household behavior, we propose new tests that distinguish between full, limited, and no commitment, based on the dynamic impact of wage shocks on household labor supply. A novelty of our approach is its ability to formally reject limited commitment, in addition to the other two types, exploiting sign restrictions from theory. We implement our tests across 15 European countries, drawing data from the EU-SILC over the years 2005-2019. We find that the elasticity of the Pareto weight with respect to favorable past wages is generally positive, consistent with bargaining under limited commitment. Past wage shocks thus induce bargaining effects on labor supply, empowering the recipient spouse and weakening the partner. Formally, we reject full and no commitment in all but 4 countries, but fail to reject limited commitment.

econ.GN↗

arXiv2025

Consumption Partial Insurance in the Presence of Tail Income Risk

We propose a simple framework to measure consumption insurance against income shocks that accounts for higher-order moments of the income distribution. We derive a nonlinear consumption function in which the extent of insurance varies with both the sign and magnitude of shocks. Using recent PSID data, we estimate an asymmetric pass-through of bad versus good permanent shocks - 17% of a 3 sigma negative shock transmits to consumption versus 9% of an equal-sized positive shock - with greater pass-through as shocks worsen. These consumption transmission rates further vary by age, wealth, and along the income distribution. Our results align with survey responses to hypothetical events and suggest that tail risk matters substantially for consumption.

econ.GN↗

arXiv2024

Income Shocks and their Transmission into Consumption

This article reviews the economics literature of, primarily, the last 20 years, that studies the link between income shocks and consumption fluctuations at the household level. We identify three broad approaches through which researchers estimate the consumption response to income shocks: 1.) structural methods in which a fully or partially specified model helps identify the consumption response to income shocks from the data; 2.) natural experiments in which the consumption response of one group who receives an income shock is compared to another group who does not; 3.) elicitation surveys in which consumers are asked how they expect to react to various hypothetical events.

econ.GN↗

arXiv2024

Commitment and the Dynamics of Household Labor Supply

The extent to which individuals commit to their partner for life has important implications. This paper develops a lifecycle collective model of the household, through which it characterizes behavior in three prominent alternative types of commitment: full, limited, and no commitment. We propose a test that distinguishes between all three types based on how contemporaneous and historical news affect household behavior. Our test permits heterogeneity in the degree of commitment across households. Using recent data from the Panel Study of Income Dynamics, we reject full and no commitment, while we find strong evidence for limited commitment.

econ.GN↗