relatively small part of the welfare costs of labor income risk over the life cycle. …

The well-documented positive correlation between income risk and wealth was interpreted as evidence for high amounts of … private wealth balance sheets. Entrepreneurs, who face high income risk, hold more wealth than employees, but it is shown that …

alternative measures of income uncertainty in a cross-section of households. In addition to the usual controls, risk aversion is …

one or the introduction of additional risks beyond a first risk can actually reduce the precautionary saving motive … because the new constraint or risk can ‘hide?the effects of the preexisting constraints or risks …

This paper examines aggregate savings in a general equilibrium model where infinitely lived households face volatile … (and possibly uncertain) income paths, hold a risk-free asset, and face a liquidity constraint. I first show that the … when income is constant. This additional capital accumulation has sometimes been interpreted as precautionary savings, but …

-cycle framework how individuals respond to recessions. Our focus is on the sharp increase in savings rates that have been observed in … times. We show that the rise in the aggregate savings ratio is driven by increases in uncertainty, rather than tighening of …

(2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states … systems as those established in the EU are able to offset the negative impact of unemployment risk on the portfolio …