Replication data for: Labor Market Uncertainty and Portfolio Choice Puzzles

Principal Investigator(s): View help for Principal Investigator(s) Yongsung Chang; Jay H. Hong; Marios Karabarbounis

Version: View help for Version V1

Name	File Type	Size	Last Modified
Data			12/07/2019 02:32:PM
Fortran-Programs			12/07/2019 02:32:PM
Read_Me.pdf	application/pdf	66.5 KB	12/07/2019 09:32:AM

Project Description

Summary: The standard life-cycle models of household portfolio choice have difficulty generating a realistic age profile of risky share. These models not only imply a high risky share on average but also a steeply decreasing age profile, whereas the risky share is mildly increasing in the data. We introduce age-dependent, labor market uncertainty into an otherwise standard model. A great uncertainty in the labor market—high unemployment risk, frequent job turnovers, and an unknown career path—prevents young workers from taking too much risk in the financial market. As labor market uncertainty is resolved over time, workers start taking more risk in their financial portfolios.

Scope of Project

JEL Classification:
      D14 Household Saving; Personal Finance
      D15 Intertemporal Household Choice; Life Cycle Models and Saving
      D81 Criteria for Decision-Making under Risk and Uncertainty
      G11 Portfolio Choice; Investment Decisions
      J31 Wage Level and Structure; Wage Differentials
      J63 Labor Turnover; Vacancies; Layoffs

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Published Versions

V1 [2019-12-07]

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