02679oam 22004693a 450 99632016640331620230622022603.0(CKB)3280000000023767(NBER)w17714(EXLCZ)99328000000002376720230622d2011 fy 0engurcnu||||||||Human Capital Risk, Contract Enforcement, and the Macroeconomy /Tom Krebs, Moritz Kuhn, Mark L. J. WrightCambridge, MassNational Bureau of Economic Research20111 online resourceillustrations (black and white);NBER working paper seriesno. w17714December 2011.We develop a macroeconomic model with physical and human capital, human capital risk, and limited contract enforcement. We show analytically that young (high-return) households are the most exposed to human capital risk and are also the least insured. We document this risk-insurance pattern in data on life-insurance drawn from the Survey of Consumer Finance. A calibrated version of the model can quantitatively account for the life-cycle variation of insurance observed in the US data and implies welfare costs of under-insurance for young households that are equivalent to a 4 percent reduction in lifetime consumption. A policy reform that makes consumer bankruptcy more costly leads to a substantial increase in the volume of credit and insurance.Working Paper Series (National Bureau of Economic Research)no. w17714.Incomplete MarketsjelcConsumption • Saving • WealthjelcEmployment • Unemployment • Wages • Intergenerational Income Distribution • Aggregate Human Capital • Aggregate Labor ProductivityjelcHuman Capital • Skills • Occupational Choice • Labor ProductivityjelcIncomplete MarketsConsumption • Saving • WealthEmployment • Unemployment • Wages • Intergenerational Income Distribution • Aggregate Human Capital • Aggregate Labor ProductivityHuman Capital • Skills • Occupational Choice • Labor ProductivityD52jelcE21jelcE24jelcJ24jelcKrebs Tom1363508Kuhn Moritz268309Wright Mark L. J630499National Bureau of Economic Research.MaCbNBERMaCbNBERBOOK996320166403316Human Capital Risk, Contract Enforcement, and the Macroeconomy3384103UNISA