“The Great Decoupling”: National Wealth and Individual Well-being

McKinsey writes about “The Great Decoupling“:

The Quarterly: How would that work? Are you referring to some sort of wage insurance?

Robert Shiller: Insurance is a fundamentally important concept. Whether it’s provided by the private sector or the government, it’s an organized response to uncertainty that affects individuals. Wage insurance is one form that has been experimented with by the US government, in fact, in an effort to deal with the problem that globalization is taking jobs out of the country. But it hasn’t been experimented with very much yet. I think we could have a much more comprehensive system of wage insurance. And we can do it without moral hazard if we manage it right.

I would argue that any sort of large, complex insurance program would be subject to some sort of moral hazard. However, it is also true that a wealthy society with volatile economics should, generally speaking, have different mores about work and livelihood than a poor society or a wealth society with stable economics.

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