Husbands Might Really Be That Cheap ∗ Matthew

This paper explores the life insurance holdings from a general equilibrium perspective. Drawing on the data explored in Chambers, Schlagenhauf, and Young (2003), we calibrate an overlapping generations lifecycle economy with incomplete asset markets to match facts regarding the uncertainty of income and demographics. We then explore the implications for life insurance demand. We find that the aggregate amount of life insurance implies a relatively-small degree ∗ We would like to thank participants in seminars at Clemson University, Florida State University, the 2003 Winter Econometric Society, the 2003 Midwest Macro Meetings, and the Federal Reserve Bank of Minneapolis as well as particular thanks to Fernando Alvarez, Jesus Fernández, Carlos Garriga, Ed Green, Stuart Low, Dave MacPherson, David Marshall, Chris Phelan, Ed Prescott, Ned Prescott, Skip Sauer, and Curtis Simon for helpful comments. We would also like to thank Charles Grassl, Curtis Knox, and Joe Travis for computational assistance and tips. Young would like to thank the Florida State University FYAP program for financial support. All remaining errors remain our errors. † Email: [email protected]. ‡ Email: [email protected] § Corresponding author. Email: [email protected].