Household Finance eJournal最新文献

{"title":"The Tax Treatment of Student Loan Discharge and Cancellation","authors":"J. Brooks","doi":"10.2139/ssrn.3756527","DOIUrl":"https://doi.org/10.2139/ssrn.3756527","url":null,"abstract":"The standard view is that, absent an express exclusion in the tax code, cancellation of student debt is taxable. Under this view, any immediate debt relief through administrative action would generate a tax bill. More troubling, the millions of borrowers in Income-Driven Repayment could face a “tax bomb” because of their promised loan cancellation, potentially hitting borrowers with bills for $100,000 or more in the same year that the government tells them their loan obligations have ended. These perverse outcomes are, however, based on a misreading of the tax law. The standard tax treatment of debt cancellation does not work with student loans, for three principal reasons. First, the history of student debt cancellation reveals that for decades any cancellation was treated as a non-taxable “scholarship,” and that likely continues to be the law applied to student loan interest subsidies. Congress added the specific exclusion for Public Service Loan Forgiveness to the tax law in 1976 so as to overrule an erroneous IRS ruling and maintain this status quo, not to carve out a limited exclusion. Second, a “general welfare exclusion” applies to numerous government payments that have a purpose of promoting the general welfare, most particularly disaster relief payments. That same logic applies to student debt cancellation, both from IDR and administrative action. Third, the complex structure of student loans, especially those in IDR, raise serious and complicated tax law questions about the nature of the debt instruments, whether the liabilities are so contingent as to be outside the standard treatment, and indeed whether they would even qualify as “debt” for tax purposes in other contexts. For these reasons and others, Treasury and the IRS have sufficient legal authority to rule that they will not assert taxation against borrowers with cancelled student loans, and they should do so.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"28 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128707635","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 Demand for Simple and Flexible Retirement Products","authors":"Pim Koopmans, M. Knoef, Max van Lent","doi":"10.2139/ssrn.3754757","DOIUrl":"https://doi.org/10.2139/ssrn.3754757","url":null,"abstract":"Many people save too little for retirement. This paper studies – using a stated choice experiment – whether simplicity and flexibility can increase the demand for retirement products. We compare the willingness-to-pay (WTP) for self-employed workers and employees, and find that the self-employed are willing to give up 8% of post-retirement benefit in order to avoid having to provide information about their financial situation. In addition, self-employed workers are willing to give up 14% in order to have the option to withdraw money in case of low income or for mortgage payments. Employees are willing to give up roughly 4% for such flexible options. Our findings imply that providing more flexible and simple retirement products likely increases pension contributions through annuities, especially for the self-employed.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"78 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126227283","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":"Technology, Labour Market Institutions and Early Retirement: Evidence from Finland","authors":"Naomitsu Yashiro, Tomi Kyyrä, Hyunjeong Hwang, Juha Tuomala","doi":"10.2139/ssrn.3764589","DOIUrl":"https://doi.org/10.2139/ssrn.3764589","url":null,"abstract":"Among various barriers to increasing employment of older workers, this paper focuses on two notable ones that are relevant for the future of work. First, older workers engaged in codifiable, routine tasks are particularly prone to the risk of being displaced by computers and robots. Second, several countries have in place various labour market institutions that encourage early retirement, such as exceptional entitlements or looser criteria for unemployment and disability benefits applied to older individuals. This paper presents evidence that these two factors reinforce each other to push older workers out of employment. It is found that older workers who are more exposed to digital technologies are more likely to leave employment, and that this effect is significantly magnified when they are eligible to an extension of unemployment benefits until they start drawing old age pension. Furthermore, a simple simulation based on the empirical findings illustrates that a reform that tightens the eligibility for the benefit extension would increase mostly the employment of older workers that are more exposed to digital technologies.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"56 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123444265","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":"Effects of Financial Instability on Subjective Well-Being: A Preference-based Approach","authors":"Stathis Polyzos, Khadija Abdulrahman, Jagadish Dandu","doi":"10.1108/IJSE-10-2020-0693","DOIUrl":"https://doi.org/10.1108/IJSE-10-2020-0693","url":null,"abstract":"PurposeThe purpose of this paper is to examine the link between banking crises and the subjective well-being of individuals. In addition, the authors examine the transmission of crises from the banking sector to well-being and show that negative financial shocks have significant adverse effects.Design/methodology/approachThe authors employ agent-based modeling to test for the direct and indirect welfare effects of banking crises. The model includes a support vector machine (SVM) optimized subjective well-being function. The existing literature suggests that this is influenced by both the negative psychological effects of recessions and the adverse economic effects of income loss and increased unemployment.FindingsThe authors show that the different choices of policy response to a banking crisis carry different opportunity costs in terms of welfare and that societal preferences should be taken into account. The authors demonstrate that these effects influence different population classes in an asymmetric manner. Finally, the results demonstrate that the welfare loss of a bank failure is much higher than the cost of a bailout.Practical implicationsThe authors are able to propose to the authorities the best policy mix in order to handle banking crises in the most adequate manner, according to society's preferences between financial stability and public goods.Social implicationsThe findings extend the existing literature on subjective well-being, by quantifying the welfare cost of banking crises and showing that authorities should reconsider bank bailouts as a policy solution to bank distress.Originality/valueThe originality of this article lies in the use of an agent-based model to model the relationship between societal well-being and financial stability. Also, the authors extend existing agent-based methodologies to include machine learning optimization techniques.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127107216","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":"Financial Literacy and Retirement Planning of Working-Age People","authors":"Tatiyaporn Sirisakdakul, Butsakorn Khornjamnong","doi":"10.35609/jfbr.2020.5.3(4)","DOIUrl":"https://doi.org/10.35609/jfbr.2020.5.3(4)","url":null,"abstract":"Objective – This study aimed to investigate the level of understanding of financial knowledge and the relationship between financial literacy and retirement planning of working-age people.\u0000Methodology/Technique – The participants of the study were residents of Sakon Nakhon, Nakhon Phanom and Mukdahan, Thailand. The questionnaire is the research tool for collecting data with 1,200 adults, aged between 25-60. This study will use a descriptive statistical analysis to describe frequency, percentage, mean and mode. Ordinary Least Squares (OLS) method is widely used to describe the relationship between financial literacy and retirement planning.\u0000Findings – The result show that the level of education has a positive relationship with financial literacy. Most of middle lower income people have a moderate to low level of the basic financial literacy and are not involved in retirement planning. The respondents of women in Sakon Nakhon, Nakhon Phanom and Mukdahan have more understanding of retirement planning than men; this result is different to the previous research undertaken by Lusardi and Mitchell (2011), Bucher-Koenen and Lusardi (2011) Grohmann et al. (2016).\u0000Novelty – This paper will study the level of understanding of financial knowledge and the relationship between financial literacy and retirement planning of working-age people. Most of the previous research concentrated on people who live in the big city; there was. little focus on people living in the countryside, especially in the Northeastern part of Thailand. Not too many papers have focused on the working-age people, who in due course will contribute to Thailand becoming an Aging Society. It could help to the government, labor union, Bureau of Financial Inclusion Policy and Development and related departments to know the level of financial knowledge and retirement planning. So, they could provide guidance of financial literacy to community.\u0000Type of Paper: Empirical\u0000Keywords: Financial Literacy; Retirement Planning; Working-Age People\u0000Reference to this paper should be made as follows: Sirisakdakul, T; Khornjamnong, B. (2020). Financial Literacy and Retirement Planning of Working-Age People, J. Fin. Bank. Review, 5 (3): 99 – 107 https://doi.org/10.35609/jfbr.2020.5.3(4)\u0000JEL Classification: E21, G02, I22, J26","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129132170","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 Mortgage-Cash Premium Puzzle","authors":"Michael Reher, Rossen Valkanov","doi":"10.2139/ssrn.3751917","DOIUrl":"https://doi.org/10.2139/ssrn.3751917","url":null,"abstract":"We document that in residential real estate transactions, mortgaged homebuyers pay a premium of 12% relative to all-cash buyers on the same property. This difference far exceeds the premium implied by standard transaction frictions and is of economic importance as all-cash purchases account for one-third of U.S. home purchases over our 1980-2017 sample. The 12% mortgage-cash premium estimate obtains under a variety of repeat-sales, instrumental variable, and semi-structural methodologies as well as novel data on backup purchase offers. A model with risk-averse home sellers, calibrated to realistic transaction frictions, implies a premium of only 3%. Explaining the remaining 9% requires sellers to be extremely risk-averse, to believe mortgaged transactions will fail 13 times more often than in the data or, in the event of transaction failure, to incur a utility loss equivalent to a 51% price cut.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128025664","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":"Broadband Internet and the Stock Market Investments of Individual Investors","authors":"Hans K. Hvide, T. Meling, M. Mogstad, O. Vestad","doi":"10.2139/ssrn.3751721","DOIUrl":"https://doi.org/10.2139/ssrn.3751721","url":null,"abstract":"We study the effects of broadband internet use on the portfolio selection of individual investors. A public program in Norway provides plausibly exogenous variation in internet use. Our instrumental variables estimates show that internet use causes a substantial increase in stock market participation, driven primarily by increased fund ownership. Existing investors increase the fraction of their portfolios held in funds and do not increase their trading activity in stocks. Access to fast internet seems to induce individual investors to make better financial decisions and hence leads to a \"democratization of finance\".","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123547224","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":"Household Cash Balances during COVID-19: A Distributional Perspective","authors":"Diana Farrell, Fiona Greig, Erica Deadman, P. Noel","doi":"10.2139/ssrn.3750255","DOIUrl":"https://doi.org/10.2139/ssrn.3750255","url":null,"abstract":"Months after the declaration of national emergency on March 13, 2020, the COVID-19 pandemic continues to impact the economy and household finances in dramatic and unprecedented ways. Household spending, which initially fell sharply during the shutdowns in March and April (Cox et al, 2020), has slowly recovered. The most financially vulnerable families have been impacted the most, with lower-income earners and Black and Latinx workers facing the highest job losses. The government responded with the massive CARES Act to bolster income and economic activity through stimulus checks, expanded unemployment benefits, and the Payroll Protection Program. Prior research has demonstrated the importance of liquid savings for maintaining financial resilience during times of uncertainty (Farrell et al, 2019; Farrell et al, 2020). What has been the net effect of these various forces on families’ liquid savings? Aggregate statistics suggest an increase in the deposits of households and nonprofits as well as commercial banks since March, 2020, but what does the picture look like for the median household and, in particular, low-income households? <br><br>We analyze trends in checking account balances between 2019 and October 2020 to understand how the pandemic and these government interventions have affected household financial outcomes across the income spectrum. As a highly liquid asset, checking accounts often serve as a family’s first line of defense to shield against financial shocks. It is also important to provide a distributional, household-centric view of account balance trends, which might be masked by aggregate public statistics on deposit levels. We address these questions via a unique data asset based on the daily balances of Chase personal checking accounts. The data asset follows the account balances of 1.8 million families across the U.S. who have been active checking account users since December 2018.<br>","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121402346","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":"Older Americans’ Spending Profiles: One Size Does Not Fit All","authors":"Z. Ebrahimi","doi":"10.2139/ssrn.3771641","DOIUrl":"https://doi.org/10.2139/ssrn.3771641","url":null,"abstract":"Understanding the spending patterns of the elderly and forming an educated estimate of households’ budgets throughout households’ old age is a key element of retirement planning. In this Issue Brief, the Employee Benefit Research Institute (EBRI) explores variations in spending of older households using the Health and Retirement Study (HRS) and the Consumption and Activities Mail Survey (CAMS). The analysis also seeks to identify the factors that are correlated with spending patterns in order to provide additional insight for approaches to saving and investment for retirement. Such analysis can also help in the development of more effective withdrawal strategies during retirement. Assessing the HRS CAMS data, we find there are four spending profiles: Typical, Home, Health, and Discretionary.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"795 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116417266","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":"Consumption Dynamics and a Home Purchase","authors":"D. Jung","doi":"10.2139/ssrn.3744586","DOIUrl":"https://doi.org/10.2139/ssrn.3744586","url":null,"abstract":"English Abstract: This paper investigates the effects of a home purchase, which is one type of durable expenditure, on changes in non-durable consumption at the household level. The results suggest that there is a break on the consumption path at the time of a home purchase; non-durable consumption in the after-period of a home purchase is 5.2% higher than the before-period. The results propose an extra path that connects the two cycles of housing markets and consumption by suggesting that home purchases trigger not only additional home-related durable spendings, but also release delayed consumption.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123668417","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}