scholarly journals Modeling Life-Cycle Earnings Risk with Positive and Negative Shocks

2017 ◽  
Author(s):  
Manuel Sanchez Garcia ◽  
Felix Wellschmied
Keyword(s):  
Life Cycle ◽  
Earnings Risk

scholarly journals Modeling life-cycle earnings risk with positive and negative shocks

2020 ◽  
Vol 37 ◽  
pp. 103-126 ◽  
Author(s):  
Manuel Sanchez ◽  
Felix Wellschmied
Keyword(s):  
Life Cycle ◽  
Earnings Risk

scholarly journals What Do Data on Millions of U.S. Workers Reveal About Life-Cycle Earnings Risk?

2015 ◽  
Author(s):  
Fatih Guvenen ◽  
Fatih Karahan ◽  
Serdar Ozkan ◽  
Jae Song
Keyword(s):  
Life Cycle ◽  
Earnings Risk

scholarly journals What Do Data on Millions of U.S. Workers Reveal About Life-Cycle Earnings Risk?

2015 ◽  
Author(s):  
Fatih Guvenen ◽  
Fatih Karahan ◽  
Serdar Ozkan ◽  
Jae Song
Keyword(s):  
Life Cycle ◽  
Earnings Risk

scholarly journals What Do Data on Millions of U.S. Workers Reveal About Life-Cycle Earnings Risk?

2015 ◽  
Author(s):  
Fatih Karahan ◽  
Fatih Guvenen ◽  
Serdar Ozkan ◽  
Jae Song
Keyword(s):  
Life Cycle ◽  
Earnings Risk

Can Tax Rebates Stimulate Consumption Spending in a Life-Cycle Model?

2014 ◽  
Vol 6 (1) ◽  
pp. 162-189 ◽  
Author(s):  
Jonathan Huntley ◽  
Valentina Michelangeli
Keyword(s):  
Life Cycle ◽  
Portfolio Choice ◽  
Precautionary Savings ◽  
Financial Assets ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Marginal Propensity To Consume ◽  
Tax Returns ◽  
Marginal Propensity ◽  
Earnings Risk

We build a life-cycle model with earnings risk, liquidity constraints, and portfolio choice over tax-deferred and taxable assets to evaluate how household consumption changes in response to shocks to transitory anticipated income, such as the 2001 income tax rebate. Households optimally invest in tax-deferred assets, which are encumbered by withdrawal penalties, and exchange taxable precautionary savings for higher after-tax returns. The model predicts a higher marginal propensity to consume out of a rebate than is predicted by a standard frictionless life-cycle model. Liquidity-constrained households—with few financial assets or portfolios expensive to reallocate—consume a higher fraction of the rebates. (JEL D91, E21, G11, H24)

scholarly journals Nonlinear Household Earnings Dynamics, Self-Insurance, and Welfare

2019 ◽  
Vol 18 (2) ◽  
pp. 890-926 ◽  
Author(s):  
Mariacristina De Nardi ◽  
Giulio Fella ◽  
Gonzalo Paz-Pardo
Keyword(s):  
Life Cycle ◽  
Linear Process ◽  
Cross Sectional ◽  
Individual Level ◽  
Consumption Insurance ◽  
Earnings Dynamics ◽  
The Individual ◽  
Standard Life ◽  
Earnings Risk ◽  
Alternative Processes

Abstract Earnings dynamics are much richer than typically assumed in macro models with heterogeneous agents. This holds for individual-pre-tax and household-post-tax earnings and across administrative and survey data. We estimate two alternative processes for household after-tax earnings and study their implications using a standard life-cycle model. Both processes feature a persistent and a transitory component, but although the first one is the canonical linear process with stationary shocks, the second one has substantially richer earnings dynamics, allowing for age-dependence of moments, non-normality, and nonlinearity in previous earnings and age. Allowing for richer earnings dynamics implies a substantially better fit of the evolution of cross-sectional consumption inequality over the life cycle and of the individual-level degree of consumption insurance against persistent earnings shocks. The richer earnings process implies lower welfare costs of earnings risk.

scholarly journals What Do Data on Millions of U.S. Workers Reveal about Life-Cycle Earnings Risk?

2015 ◽  
Author(s):  
Fatih Guvenen ◽  
Fatih Karahan ◽  
Serdar Ozkan ◽  
Jae Song
Keyword(s):  
Life Cycle ◽  
Earnings Risk
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