The study looked at how people manage the risk of losing income and found that individuals have some informal ways to protect themselves. They used a model to estimate how much of their income risk people can smooth out, how much they know about their income growth, and how persistent income shocks are. The researchers discovered that income shocks last for a while, people have good knowledge of their income growth, and about half of income shocks are lessened by informal insurance. Overall, people perceive less lifetime income risk than what is usually assumed in economic models.