{"title":"Couple's Relative Labor Supply in Intermarriage","authors":"Olga Nottmeyer","doi":"10.2139/ssrn.1790678","DOIUrl":"https://doi.org/10.2139/ssrn.1790678","url":null,"abstract":"In this paper the hypothesis that partnerships between immigrants and natives are less specialized – in the sense that spouses provide similar working hours per weekday – than those between immigrants is tested. The empirical analysis relies on panel data using a two-limit random effects tobit framework to identify determinants of a gender-neutral specialization index. Results indicate that for immigrants intermarriage is indeed related to less specialization as is better education and smaller diversion in education between spouses. In contrast, children living in the household, as well as being Muslim or Islamic, lead to greater specialization. Intermarried immigrants specialize less presumably due to smaller comparative advantages resulting from positive assortative mating by education and different bargaining positions within the household. Natives, on the other hand, show different patterns: for them the likelihood to specialize increases with intermarriage. This might also results from differences in bargaining strength or be due to adaptation to immigrants’ expected behavior.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"81 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130297704","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Should Pensions Be Progressive? Yes, at Least in Germany!","authors":"H. Fehr, M. Kallweit, F. Kindermann","doi":"10.2139/ssrn.1809699","DOIUrl":"https://doi.org/10.2139/ssrn.1809699","url":null,"abstract":"Recent reforms that aim at reducing the upcoming burdens of population ageing might seriously harm low income individuals. An increase in old-age poverty and disability will be the result. Under this prospect, the present paper quantitatively characterizes the optimal progressivity of unfunded pension systems in an overlapping generations model with idiosyncratic income, disability and longevity risk as well as endogenous labor supply at the intensive and extensive margin. Focusing on the German pension system, our model features the most recent demographic projections and distinguishes three skill classes with skill-dependent risk profiles. Starting from a baseline path that reflects a purely earnings related pension system, we increase the degree of progressivity and compute the resulting macroeconomic, welfare and efficiency effects. For our most preferred parametrization we find an optimal flat-rate pension share of 40 percent. This indicates that in Germany recent reforms that aim at raising retirement age and cutting benefit levels should be complemented by increases in pension progressivity, since improved insurance provision dominates higher labor supply distortions. In addition, we also find that reductions in the benefit level (i.e. privatization) will only reduce economic efficiency.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123766709","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Road to Retirement - Bumpy or Smooth, Depends on Your Route, January 2011","authors":"Anand S. Iyer, M. Subramanian, Vikash Punglia","doi":"10.2139/SSRN.1753981","DOIUrl":"https://doi.org/10.2139/SSRN.1753981","url":null,"abstract":"Defined Contribution (DC) plans are rapidly becoming the primary retirement investment vehicle for a majority of employees across the US and other markets around the globe. Asset allocation for DC plans has to strike a balance between growth and protection assets over the savings lifecycle while protecting the long-term purchasing power of the nest egg. Due to the long duration of retirement investing and various risks associated with it, implementing the right asset allocation has become critical and challenging for DC plans.The unique Risk Focused methodology presented in this paper aims to address the shortcomings of conventional Target Date Funds experienced during the 2008 financial crisis. The proposed approach addresses the cumulative impact of shortfall, sequence of returns, longevity, and market risks in determining asset allocation at different time horizons. This is accomplished by combining the term structure of risk, return, and covariance of asset classes with an explicit risk budget. The Risk Focused glide path potentially delivers comparable retirement wealth outcomes with enhanced downside protection, lower journey volatility, and attempts to facilitate a smoother journey on the road to retirement. Hence, the caption of the paper, \"Road to Retirement – Bumpy or Smooth, Depends on your Route\".","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"55 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131067221","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Who Lost the Most? Financial Literacy, Cognitive Abilities, and the Financial Crisis","authors":"Tabea Bucher-Koenen, Michael Ziegelmeyer","doi":"10.2139/ssrn.1738368","DOIUrl":"https://doi.org/10.2139/ssrn.1738368","url":null,"abstract":"The recent financial crisis caused a shock to private wealth. Households with low financial literacy are less likely to own risky assets directly. Therefore, fewer of them report financial losses. More importantly, financially illiterate households are more prone to sell assets that have lost in value. Thereby losses become permanent, and these households do not participate in markets’ resurgence. This flight from risky assets is persistent—the financial crisis may prove to be a traumatic experience that shapes investment behavior and gives rise to serious distributional consequences, as households with lower financial literacy face lower returns in the long run.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"466 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132986508","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Drawdown of Personal Retirement Assets","authors":"J. Poterba, Steven F. Venti, D. Wise","doi":"10.2139/ssrn.1785403","DOIUrl":"https://doi.org/10.2139/ssrn.1785403","url":null,"abstract":"How households draw down the balances that they accumulate in retirement saving accounts such as 401(k) plans and Individual Retirement Accounts can have an important effect on the contribution of these accounts to retirement income security. This paper presents evidence on the pattern of withdrawals at different ages. We find a relatively modest rate of withdrawals prior to the age at which households are required to take minimum required distributions. Only seven percent of PRA-owning households between the ages of 60 and 69 take annual distributions of more than ten percent of their PRA balance, and only 18 percent of PRA households in this age group make any withdrawals in a typical year. The rate of distributions rises sharply after age 70 1/2, when minimum distributions are required. The proportion of PRA-owning households making a withdrawal jumps to over 60 percent by age 71, and crosses 70 percent a few years later. On average, households age 60 to 69 with PRA accounts withdraw only about two percent of their account balances each year, considerably less than the rate of return on account balances during our sample period. Even at older ages--after the required minimum distribution age--the percentage of balances withdrawn remains at about five percent.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130109960","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"With or Without You: Divorce Rates and Intra-Household Allocation of Time","authors":"Domenico Tabasso","doi":"10.2139/ssrn.1704265","DOIUrl":"https://doi.org/10.2139/ssrn.1704265","url":null,"abstract":"This paper investigates the relationship between the probability of divorce and marriage specific investments. As these investments in terms of childcare and household activities are likely to increase the marital surplus, they are consequently likely to decrease the risk of divorce. All such activities, however, are characterized by gender role bias through, for example, social norms. In periods in which married women enjoy greater outside options (e.g., by increasing their labor force participation), it is expected that households in which the husband takes on typically female chores are less likely to dissolve, while couples in which the wife takes on typically male chores are more likely to divorce. The paper tests this hypothesis using data from the National Longitudinal Survey (NLS) of Mature Women, the NLS Young Women, and the NLSY79. The prediction is strongly supported by the data with respect to older cohorts while it loses empirical relevance when tested on younger individuals. Furthermore, asymmetric effects between genders gain importance over time. Finally, an explanation for the relationship between divorce and marital investments is offered in terms of increasing intra-household time consumption complementarities. To this end, data from the American Time Use Surveys from 1965 to 2005 are studied to illustrate how time spent together by partners in the same household has become increasingly crucial in the American family.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"04 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127283299","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Elites Behaving Badly","authors":"J. Fedderke, C. Kularatne","doi":"10.2139/ssrn.1809867","DOIUrl":"https://doi.org/10.2139/ssrn.1809867","url":null,"abstract":"This paper presents a model to account for the behaviour of social elites, in terms of their decisions to distribute resources between themselves, and a mass of disadvantaged members of society. Privileged members of society have the opportunity to allocate resources either to improve their own productive capacity, or to enhance the productive capacity of the disadvantaged. Redistribution in favour of the disadvantaged increases the productive capacity of society, but comes at the cost of rising political aspirations of the poor, which erodes the power of the elite. The paper derives conditions under which (a) the elite will redistribute to the point of equality with the disadvantaged; (b) conditions under which the disadvantaged are subject to extreme forms of extraction by the elite; as well as (c) the range of intermediate redistributive activity likely to be employed by the privileged. Examination of empirical evidence suggests that the model generalizes across the experience of a panel of 102 countries.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126014531","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Starting a New Chapter: The Role of Credit Counseling in Helping Debtors Recover from Bankruptcy","authors":"Angela C. Lyons, Shawn Howard, Erik Scherpf","doi":"10.2139/ssrn.1711895","DOIUrl":"https://doi.org/10.2139/ssrn.1711895","url":null,"abstract":"The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) includes two educational provisions which require debtors to complete an approved credit counseling course prior to filing for bankruptcy and a financial education course prior to the discharge. Recent debates have raised concerns about the counseling mandate and whether debtors are benefiting from the requirement. A multi-phase research study was launched in 2009 to investigate the impact of BAPCPA’s educational mandates. The goal was to track debtors through the entire bankruptcy process and assess the long-term impacts of the requirements on debtors’ financial well-being. This study reports the findings from the first phase of the analysis where data were collected from a national sample of debtors who participated in a bankruptcy counseling course offered by one of the largest full-service nonprofit consumer credit counseling agency in the U.S. The purpose of the study was to measure the 'educational value' of the counseling and to identify specific groups of debtors who were more likely than others to benefit from the experience. The results show that overall debtors were very satisfied with their counseling experience. Moreover, their financial knowledge, attitudes, and behavioral intentions significantly improved as a result of the counseling. The effects of the counseling were primarily dependent on debtors' prior knowledge, behavior, and socioeconomic status, as well as the circumstances that resulted in their current financial problems. There was little, if any, evidence to suggest that the counseling requirement had been a burden or an administrative obstacle.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127505479","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Estimating Aggregate Consumer Preferences from Online Product Reviews","authors":"Reinhold Decker, M. Trusov","doi":"10.2139/ssrn.1670653","DOIUrl":"https://doi.org/10.2139/ssrn.1670653","url":null,"abstract":"Today, consumer reviews are available on the Internet for a large number of product categories. The pros and cons expressed in this way uncover individually perceived strengths and weaknesses of the respective products, whereas the usually assigned product ratings represent their overall valuation. The key question at this point is how to turn the available plentitude of individual consumer opinions into aggregate consumer preferences, which can be used, for example, in product development or improvement processes.To solve this problem, an econometric framework is presented that can be applied to the mentioned type of data after having prepared it using natural language processing techniques. The suggested methodology enables the estimation of parameters, which allow inferences on the relative effect of product attributes and brand names on the overall evaluation of the products. Specifically, we discuss options for taking opinion heterogeneity into account. Both the practicability and the benefits of the suggested approach are demonstrated using product review data from the mobile phone market. This paper demonstrates that the review-based results compare very favorably with consumer preferences obtained through conjoint analysis techniques.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"62 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-09-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123460477","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Expenditure Cascades","authors":"A. Levine, R. Frank, Oege Dijk","doi":"10.2139/ssrn.1690612","DOIUrl":"https://doi.org/10.2139/ssrn.1690612","url":null,"abstract":"Prevailing economic models of consumer behavior completely ignore the well-documented link between context and evaluation. We propose and test a theory that explicitly incorporates this link. Changes in one group’s spending shift the frame of reference that defines consumption standards for others just below them on the income scale, giving rise to expenditure cascades. Our model, a descendant of James Duesenberry’s relative income hypothesis, predicts the observed ways in which individual savings rates respond to changes in both own and others’ permanent income, as well as numerous other stylized fact patterns that are difficult to reconcile with prevailing models.","PeriodicalId":175023,"journal":{"name":"ERN: Intertemporal Consumer Choice; Life Cycle Models & Savings (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130656945","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}