Household Finance eJournal最新文献

{"title":"Student Loans and Social Mobility","authors":"M. Ebrahimian","doi":"10.2139/ssrn.3680159","DOIUrl":"https://doi.org/10.2139/ssrn.3680159","url":null,"abstract":"Students of poor families invest much less than rich families in college education. To assess the role of financing constraints and subsidy schemes in explaining this gap, I structurally estimate an IO/finance model of college choice in the presence of financing frictions. The estimation uses novel nationally representative data on US high-school and college students. I propose a novel identification strategy that relies on bunching at federal Stafford loan limits and differences between in- and out-of-state tuition. I find that the college investment gap is mainly due to fundamental factors—heterogeneity in preparedness for college and the value-added of college—rather than financing constraints faced by lower-income students. Making public colleges tuition-free would substantially reduce student debt, but it would disproportionately benefit wealthier students, and it would entail more than $15B deadweight loss per year by distorting college choices. Expanding Pell grants, in contrast, would benefit lower-income students at a much lower cost.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"173 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125793464","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":"How Much Taxes Will Retirees Owe on Their Retirement Income?","authors":"Anqi Chen, A. Munnell","doi":"10.2139/ssrn.3786216","DOIUrl":"https://doi.org/10.2139/ssrn.3786216","url":null,"abstract":"To evaluate their retirement resources, households approaching retirement will examine their Social Security statements, defined benefit pensions, defined contribution balances, and other financial assets. However, many households may forget that not all of these resources belong to them; they will need to pay some portion to federal and state government in taxes. It is unclear, however, just how large the tax burden is for the typical retired household and for households with different income levels. This project aims to shed light on the tax burdens that retirees face by estimating lifetime taxes for a group of recently retired households. The project uses data from the Health and Retirement Study (HRS) linked to administrative earnings to determine Social Security benefits and administrative records on state of residence to estimate state tax liabilities. Income is then projected over the expected retirement of each household. Federal and state taxes, are estimated with TAXSIM, for each household on its reported and projected income.<br><br>The paper found that:<br>• These estimates show that households in the aggregate will have to pay about 6 percent of their income in federal and state income taxes.<br><br>• But this liability rests primarily with the top quintile of the income distribution.<br><br>• For the lowest four quintiles, taxes are negligible – ranging from 0 percent to 1.9 percent.<br><br>• In contrast, the average liability is 11.3 percent for the top quintile, 16.4 percent for the top 5 percent, and 22.7 percent for the top 1 percent.<br><br>The policy implications of the findings are:<br>• Taxes are meaningful for the top quintile, who are mostly married couples with average<br>combined Social Security benefits of $50,900, 401(k)/IRA balances of $325,400 and financial wealth of $441,400.<br><br>• If these retirement and financial assets were fully annuitized, the amount a household would receive is equivalent to about $3,000 a month, and these households face tax<br>liabilities of about 11 percent.<br><br>• Thus, for many households reliant on 401(k)/IRA or financial assets for security in retirement, taxes are an important consideration.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"117 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124225872","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":"Is Literacy a Multi-dimensional Concept? Some Empirical Evidence","authors":"Georgios A. Panos, T. Kromydas, M. Osborne, R. Wright","doi":"10.2139/ssrn.3733207","DOIUrl":"https://doi.org/10.2139/ssrn.3733207","url":null,"abstract":"Literacy is a multi-dimensional concept. In this chapter, seven potential dimensions of literacy are considered: (1) Mathematical literacy, (2) Foreign language literacy, (3) Digital literacy, (4) Financial literacy, (5) Political literacy, (6) Environmental literacy, and (7) Health literacy. Data from the Glasgow-based Integrated Multimedia City Data (iMCD) project included information that allows for the operationalization of these dimensions. Multiple-regression analysis is used to explore the correlates of these dimensions of literacy. One key finding is that there are gender differences in all the dimensions of literacy. There are large advantages in favour of males with respect to political, digital, financial, and environmental literacy, health and mathematical literacy. The only advantage in the favour of females is foreign language literacy.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"99 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131955903","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":"A Decade of U.S. Natural Disasters and Household Food-at-Home Expenditures and Quality: A Quasi-Experimental Study","authors":"A. Wahdat, M. Delgado","doi":"10.2139/ssrn.3743787","DOIUrl":"https://doi.org/10.2139/ssrn.3743787","url":null,"abstract":"This study exploits spatial and temporal variation in natural disasters in the United States via a generalized differences-in-differences approach to identify the impact of natural disasters on households’ food-at-home (FAH) spending and quality from 2005 to 2016. We use two datasets: (i) the Storm Events Database to identify U.S. counties that experience severe economic losses as a result of droughts, floods, hurricanes, and tornadoes, and (ii) the Nielsen Consumer Panel Data for grocery data. We find that only floods and hurricanes affect FAH spending. Floods (Hurricanes) have a persistent (immediate) effect on FAH spending. On average, highly damaging floods (hurricanes) decrease 15-day FAH spending by about $2 ($7) in 90 days (30 days) after the events. The FAH quality effect of the four natural disasters is either inconsequential or nonexistent. We provide indirect evidence that the FAH spending effect of natural disasters works through both income and price channels. We also find that hurricanes have an anticipation effect on total grocery spending which starts 15 days before the disaster date. Our results are robust to an alternative specification that controls for county-specific linear trends. We add to the growing body of literature on the effects of natural disasters on household finances and financial decisions. Our findings could be of particular interest to post-disaster relief organizations and their programs.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127300733","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":"Declining Discount Rates in Singapore's Market for Privately Developed Apartments","authors":"Eric Fesselmeyer, Haoming Liu, A. Salvo","doi":"10.2139/ssrn.2754429","DOIUrl":"https://doi.org/10.2139/ssrn.2754429","url":null,"abstract":"We examine Singapore's market for new privately developed apartments, which for historical reasons exhibits wide quasi-experimental variation in ownership tenure, ranging from perpetual to multi-century to multi-decade leases. We develop an empirical model in which transaction prices are decomposed into the utility of housing services and a second factor that shifts with asset tenure and the discount rate schedule. We implement the model using nonlinear least squares to directly estimate the discount rate schedule, disciplining it to vary smoothly over time through alternative parametric forms or a trend acceleration penalty. Across different specifications, we estimate discount rates that decline over time and, to accommodate the observed price differences, fall to 0.5-1.5% p.a. by year 400. The finding that households making sizable transactions do not entirely discount benefits that will accrue centuries from today contributes to the empirical literature on discounting and is relevant, with the appropriate risk adjustment, for evaluating climate-change investments.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114062094","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":"Retirement Tontines: Using a Classical Finance Mechanism as an Alternative Source of Retirement Income","authors":"J. Iwry, Claire Haldeman, W. Gale, David C. John","doi":"10.2139/ssrn.3728262","DOIUrl":"https://doi.org/10.2139/ssrn.3728262","url":null,"abstract":"We explore how a classical finance mechanism — the tontine — could help retirees manage their assets. Tontines are investment pools where members commit funds irrevocably and where the interests of members who die are given to those who survive. Tontines were popular in the U.S. in the late 19th and early 20th centuries, until they were effectively prohibited in response to insurance company mismanagement. Tontine-inspired products are receiving renewed attention around the world as efficient, transparent ways to finance retirement. Unlike fixed income annuities, tontine pooling does not guarantee future payments, but should pay more on average per dollar invested, with less costly regulation.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130163174","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 Well-being among Black and Hispanic Women","authors":"R. Clark, A. Lusardi, O. Mitchell, Hallie Davis","doi":"10.2139/ssrn.3792558","DOIUrl":"https://doi.org/10.2139/ssrn.3792558","url":null,"abstract":"This paper provides an in-depth examination of the financial well-being Black and Hispanic women and the factors contributing to it, using the 2018 wave of the National Financial Capability Study. We document meaningful differences between Black and Hispanic women versus White women, in that the former are more likely to face economic challenges that depress financial well-being. Controlling for differences in socio-demographic characteristics, there are important differences in the factors that contribute to financial well-being for Black and Hispanic women compared to White women. This includes distinct impacts of education, family structure, employment, and financial literacy. Our results imply that extant financial education programs inadequately address the needs of Black and Hispanic women.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"85 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117156041","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":"Safeguarding Small Town Purse Strings From Financial Fraud","authors":"Gary A. Mattson","doi":"10.2139/ssrn.3708488","DOIUrl":"https://doi.org/10.2139/ssrn.3708488","url":null,"abstract":"For small towns three common factors for financial fraud are most apparent: inadequate trained staff, elected official's failure to institute strict audit budgetary controls, and the willingness to appoint an entrusted administrator to assume complete control over the financial managerial process. This is conference paper investigates the cultural-organization factors that allowed for publicly appointed officials to perpetrate such budgetary fraud of public monies and the financial safeguards that may prevent and discourage such fraudulent behavior.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132135953","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":"Millionaires Speak: What Drives Their Personal Investment Decisions?","authors":"Svetlana Bender, James J. Choi, Danielle Dyson, Adriana Z. Robertson","doi":"10.3386/w27969","DOIUrl":"https://doi.org/10.3386/w27969","url":null,"abstract":"Abstract We survey 2,484 U.S. individuals with at least $1 million of investable assets about how well leading academic theories describe their financial beliefs and personal investment decisions. The wealthy's beliefs about financial markets and the economy are surprisingly similar to those of the average U.S. household, but the wealthy are less driven by discomfort with the market, financial constraints, and labor income considerations. Portfolio equity share is most affected by professional advice, time until retirement, personal experiences, rare disaster risk, and health risk. Concentrated equity holding is most often motivated by belief that the stock has superior risk-adjusted returns. Beliefs about how expected returns vary with stock characteristics frequently differ from historical relationships, and more risk is not always associated with higher expected returns. Active equity fund investment is most motivated by professional advice and the expectation of higher average returns. Berk and Green (2004) rationalize return chasing in the absence of fund performance persistence by positing that past returns reveal managerial skill but there are diminishing returns to scale in active management. Forty-two percent of respondents agree with the first assumption, 33% with the second, and 19% with both.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"80 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134396124","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":"How Do People Respond to Small Probability Events with Large, Negative Consequences?","authors":"M. Eichenbaum, Miguel Godinho de Matos, Francisco Lima, Sergio Rebelo, M. Trabandt","doi":"10.3386/w27988","DOIUrl":"https://doi.org/10.3386/w27988","url":null,"abstract":"We study how people react to small probability events with large negative consequences using the outbreak of the COVID-19 epidemic as a natural experiment. Our analysis is based on a unique administrative data set with anonymized monthly expenditures at the individual level. We find that older consumers reduced their spending by more than younger consumers in a way that mirrors the age dependency in COVID-19 case-fatality rates. This differential expenditure reduction is much more prominent for high-contact goods than for low-contact goods and more pronounced in periods with high COVID-19 cases. Our results are consistent with the hypothesis that people react to the risk of contracting COVID-19 in a way that is consistent with a canonical model of risk taking.","PeriodicalId":428959,"journal":{"name":"Household Finance eJournal","volume":"2020 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120960234","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}