A major debate exists on whether expanding tax--favoured savings accounts such as Individual Retirement Accounts (IRAs) will increase national savings. Much of the empirical debate has centred on whether IRA contributions before the Tax Reform Act of 1986 represented new savings or merely...

This paper studies some empirical implications of models with limited risk sharing due to the imperfect enforceability of contracts. We test whether the amount by which public transfers reduce private transfers is affected by features of the economy, such as the variance of income and its...

This paper studies the paths from inequality in earnings to inequality in household consumption. We show that careful study of the evolution of the variances and covariances of earnings and consumption within cohorts across time can identify permanent and transitory shocks. We present an...

Friedman's book on the consumption function is one of the great works of Economics demonstrating how the interplay between theoretical ideas and data analysis can lead to major policy implications. We present a short review of Friedman's permanent income hypothesis, the origins of the idea and...

The definition of labor force participation in the standard labor supply model stands in sharp contrast to that used in compiling the labor force statistics. In standard labor supply models, only those supplying positive hours of work are considered to be labor force participants. On the other...

This mix of state and private pension provision in the United Kingdom provides a rare degree of variation in pension incentives for retirement. Using a sample of individuals from the UK Retirement Survey, the paper models the probability of retirement in terms of the incentives underlying the...