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Displaying results 1 to 11 of 11.

  1. The How and Why of Household Reactions to Income Shocks
    Author: Colarieti, Roberto; Mei, Pierfrancesco; Stantcheva, Stefanie
    Published: March 2024
    Publisher:  National Bureau of Economic Research, Cambridge, Mass

    This paper studies how and why households adjust their spending, saving, and borrowing in response to transitory income shocks. We leverage new large-scale survey data to first quantitatively assess households' intertemporal marginal propensities to... more

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    This paper studies how and why households adjust their spending, saving, and borrowing in response to transitory income shocks. We leverage new large-scale survey data to first quantitatively assess households' intertemporal marginal propensities to consume (MPCs) and deleverage (MPDs) (the "how"), and second to dive into the motivations and decision-making processes across households (the "why"). The combination of the quantitative estimation of household response dynamics with a qualitative exploration of the mental models employed during financial decisions provides a more complete view of household behavior. Our findings are as follows: First, we validate the reliability of surveys in predicting actual economic behaviors using a new approach called cross-validation, which compares the responses to hypothetical financial scenarios with observed actions from past studies. Participants' predicted reactions closely align with real-life behaviors. Second, we show that MPCs are significantly higher immediately following an income shock and diminish over time, with cumulative MPCs over a year showing significant variability. However, MPDs play a critical role in household financial adjustments and display significantly more cross-sectional heterogeneity. Neither is easily explained by socioeconomic or financial characteristics alone, and the explanatory power is improved by adding psychological factors, past experiences, and expectations. Third, using specifically-designed survey questions, we find that there is a broad range of motivations behind households' financial decisions and identify four household types using machine learning: Strongly Constrained, Precautionary, Quasi-Smoothers, and Spenders. Similar financial actions stem from diverse reasons, challenging the predictability of financial behavior solely based on socioeconomic and financial characteristics. Finally, we use our findings to address some puzzles in household finance

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Series: NBER working paper series ; no. w32191
    Subjects: Privater Haushalt; Haushaltseinkommen; Schock; Verhalten; Privater Konsum; Anlageverhalten; Consumer Economics: Empirical Analysis; Intertemporal Household Choice; Life Cycle Models and Saving; Consumption; Saving; Wealth; Household
    Scope: 1 Online-Ressource, illustrations (black and white)
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  2. Long Term Care Risk for Couples and Singles
    Author: Capatina, Elena; Hansen, Gary D.; Hsu, Minchung
    Published: March 2024
    Publisher:  National Bureau of Economic Research, Cambridge, Mass

    This paper compares the impact of long term care (LTC) risk on single and married households and studies the roles played by informal care (IC), consumption sharing within households, and Medicaid in insuring this risk. We develop a life-cycle model... more

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    This paper compares the impact of long term care (LTC) risk on single and married households and studies the roles played by informal care (IC), consumption sharing within households, and Medicaid in insuring this risk. We develop a life-cycle model where individuals face survival and health risk, including the possibility of becoming highly disabled and needing LTC. Households are heterogeneous in various important dimensions including education, productivity, and the age difference between spouses. Health evolves stochastically. Agents make consumption-savings decisions in a framework featuring an LTC state-dependent utility function. We find that household expenditures increase significantly when LTC becomes necessary, but married individuals are well insured against LTC risk due to IC. However, they still hold considerable assets due to the concern for the spouse who might become a widow/widower and can expect much higher LTC costs. IC significantly reduces precautionary savings for middle and high income groups, but interestingly, it encourages asset accumulation among low income groups because it reduces the probability of means-tested Medicaid LTC

     
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    Source: Union catalogues
    Language: English
    Media type: Book
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    Series: NBER working paper series ; no. w32196
    Subjects: Ältere Menschen; Gesundheitsrisiko; Pflegebedürftigkeit; Häusliche Pflege; Familie; USA; Collaborative Consumption; Consumption; Saving; Wealth; Household; Economics of the Elderly; Economics of Disability; Non-Labor Market Discrimination
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  3. The Multigenerational Impact of Children and Childcare Policies
    Author: Karademir, Sencer; Laliberté, Jean-William P.; Staubli, Stefan
    Published: March 2024
    Publisher:  National Bureau of Economic Research, Cambridge, Mass

    This paper examines the multigenerational impact of children and whether the public provision of formal childcare lessens the earnings and employment impacts of children. We find that the arrival of a firstborn reduces employment and earnings of... more

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    This paper examines the multigenerational impact of children and whether the public provision of formal childcare lessens the earnings and employment impacts of children. We find that the arrival of a firstborn reduces employment and earnings of mothers and employment of grandmothers. Studying a universal childcare program in Quebec, we find formal childcare increases the employment rates of mothers, as well as that of grandmothers to a lesser extent. Examining heterogeneity of the program's impact across Census Divisions, we find a negative correlation between the positive effects on mothers' employment and the pre-policy supply of informal childcare by grandmothers

     
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    Source: Union catalogues
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    Series: NBER working paper series ; no. w32204
    Subjects: Kinderbetreuung; Arbeitsangebotsverhalten; Mütter; Familie; Familienpolitik; Kanada; Household; Labor Economics Policies; Fertility; Family Planning; Child Care; Children; Youth; Economics of Gender; Non-labor Discrimination; Public Policy; Time Allocation and Labor Supply
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  4. The differential impact of covid-19 on household carbon footprint: a gender perspective
    Julia Jadin, Florine Le Henaff
    Author: Jadin, Julia; Le Henaff, Florine
    Published: June 2024
    Publisher:  ECARES, Brussels, Belgium

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    Source: Union catalogues
    Language: English
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    hdl: 2013/ULB-DIPOT:oai:dipot.ulb.ac.be:2013/374567
    Series: ECARES working paper ; 2024, 09
    Subjects: Covid-19; Household; Carbon Footprint:; Gender
    Scope: 1 Online-Ressource (circa 50 Seiten), Illustrationen
  5. Bad Luck or Bad Decisions? Macroeconomic Implications of Persistent Heterogeneity in Cognitive Skills and Overconfidence
    Author: Pfäuti, Oliver; Seyrich, Fabian; Zinman, Jonathan
    Published: April 2024
    Publisher:  National Bureau of Economic Research, Cambridge, Mass

    Business cycle models often abstract from persistent household heterogeneity, despite its potentially significant implications for macroeconomic fluctuations and policy. We show empirically that the likelihood of being persistently financially... more

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    Business cycle models often abstract from persistent household heterogeneity, despite its potentially significant implications for macroeconomic fluctuations and policy. We show empirically that the likelihood of being persistently financially constrained decreases with cognitive skills and increases with overconfidence thereon. Guided by this and other micro evidence, we add persistent heterogeneity in cognitive skills and overconfidence to an otherwise standard HANK model. Overconfidence proves to be the key innovation, driving households to spend instead of precautionary save and producing empirically realistic wealth distributions and hand-to-mouth shares and MPCs across the income distribution. We highlight implications for various fiscal policies

     
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  6. The Global Life-Cycle Optimizer – Analyzing Fiscal Policy's Potential to Dramatically Distort Labor Supply and Saving
    Author: Brumm, Johannes; Kotlikoff, Laurence J.; Krause, Christopher
    Published: April 2024
    Publisher:  National Bureau of Economic Research, Cambridge, Mass

    Fiscal policy in the U.S. and other countries renders intertemporal budgets non-differentiable, nonconvex, and discontinuous. Consequently, assessing work and saving responses to policy requires global optimization. This paper develops the Global... more

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    Fiscal policy in the U.S. and other countries renders intertemporal budgets non-differentiable, nonconvex, and discontinuous. Consequently, assessing work and saving responses to policy requires global optimization. This paper develops the Global Life-Cycle Optimizer (GLO), a stochastic pattern-search algorithm. The GLO robustly, precisely, and quickly locates global optima in highly complex fiscal settings. We use the GLO to study how a stylized U.S. fiscal system distorts workers' labor supply and saving assuming standard preferences. The system incorporates kinks from federal personal income tax brackets, Social Security's FICA tax, and a notch from the provision of basic income below a threshold. The GLO reproduces theoretically predicted earnings bunching and flipping over a remarkably wide range of wage rates. Saving distortions can be equally dramatic. Associated excess burdens range from substantial to massive. Restricting labor supply to full-or part-time work can eliminate flipping when it's optimal and produce flipping when it's suboptimal. Joint filing can significantly reduce the earnings of lower-wage spouses relative to that of higher-wage spouses. The GLO can be applied to assess a country's or state's full set of work and saving disincentives. Consequently, it can facilitate analyses of structural labor supply and tax reform

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Series: NBER working paper series ; no. w32335
    Subjects: Finanzpolitik; Modellierung; Lebenszyklus; Wirkungsanalyse; Arbeitsangebot; Konsumentenverhalten; Sparen; Theorie; Taxation, Subsidies, and Revenue; Fiscal Policies and Behavior of Economic Agents; General; Household; Government Policy; Provision and Effects of Welfare Programs; Time Allocation and Labor Supply
    Scope: 1 Online-Ressource, illustrations (black and white)
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  7. Tax complexity as price discrimination
    Author: Agersnap, Ole; Bjørkheim, Julie Brun
    Published: [2024]
    Publisher:  Norwegian School of Economics, Bergen, Norway

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    Source: Union catalogues
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    Other identifier:
    hdl: 11250/3115561
    Series: Discussion paper / Department of Business and Management Science ; FOR 2024, 4 (February 2024)
    Subjects: Taxation; Personal Income Taxes; Fiscal Policies and Behavior of Economic Agents; Household; Tax Evasion and Avoidance
    Scope: 1 Online-Ressource (circa 53 Seiten), Illustrationen
  8. Taxing Top Wealth
    Migration Responses and their Aggregate Economic Implications
    Author: Jakobsen, Katrine; Kleven, Henrik Jacobsen; Kolsrud, Jonas; Landais, Camille; Muñoz, Mathilde
    Published: February 2024
    Publisher:  National Bureau of Economic Research, Cambridge, Mass

    Using administrative data on wealth, firm ownership structure, and migration in Sweden and Denmark, we document international migration patterns among the very wealthy, their impact on the economy, and how they respond to wealth taxation. We show... more

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    Using administrative data on wealth, firm ownership structure, and migration in Sweden and Denmark, we document international migration patterns among the very wealthy, their impact on the economy, and how they respond to wealth taxation. We show that more than 20% of taxpayers liable to pay wealth tax are business-owners, and that the employment, investments, and value-added of these businesses are negatively affected when their owner migrates out of the country. Exploiting three large reforms, we then isolate the causal effect of wealth taxation on the international location choices of the wealthy. We find significant effects on out-migration flows from increases in the effective wealth tax. But, we also document that the overall level of these migration flows is remarkably small, with annual net-migration rates below .01%. As a result, we find that the aggregate economic effects of tax-induced migration are modest in Scandinavia: a one percentage point increase in the average wealth tax rate on the top 2% decreases the stock of wealthy taxpayers by at most 2% in the long run, and lead to a reduction of at most .03% in aggregate employment and at most .1% in aggregate value- added. Hence, our results suggest that trickle-down effects of tax-induced migration by the wealthy do exist, but that they are quantitatively small

     
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    Source: Union catalogues
    Language: English
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    Series: NBER working paper series ; no. w32153
    Subjects: Privatvermögen; Steuerpolitik; Vermögensteuer; Steuerwirkung; Wirkungsanalyse; Unternehmer; Internationale Migration; Wohnstandortwahl; Schweden; Dänemark; Personal Income, Wealth, and Their Distributions; Consumption; Saving; Wealth; General; Household; Entrepreneurship
    Scope: 1 Online-Ressource, illustrations (black and white)
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  9. Intrahousehold Welfare
    Theory and Application to Japanese Data
    Author: Chiappori, Pierre-André; Meghir, Costas; Okuyama, Yoko
    Published: July 2024
    Publisher:  National Bureau of Economic Research, Cambridge, Mass

    In this paper we develop a novel approach to measuring individual welfare within households, recognizing that individuals may have both different preferences (particularly regarding public consumption) and differential access to resources. We... more

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    In this paper we develop a novel approach to measuring individual welfare within households, recognizing that individuals may have both different preferences (particularly regarding public consumption) and differential access to resources. We construct a money metric measure of welfare that accounts for public goods (by using personalized prices) and the allocation of time. We then use our conceptual framework to analyse intrahousehold inequality in Japan, allowing for the presence of two public goods: expenditures on children and other public goods including housing. We show empirically that women have much stronger preferences for both public goods and this has critical implications for the distribution of welfare in the household

     
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    Source: Union catalogues
    Language: English
    Media type: Book
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    Series: NBER working paper series ; no. w32645
    Subjects: Privater Haushalt; Familie; Konsumentenpräferenzen; Privater Konsum; Familienplanung; Wohlfahrtsökonomik; Haushaltsökonomik; Japan; Household; Public Goods; Marriage; Marital Dissolution; Family Structure; Domestic Abuse; Fertility; Family Planning; Child Care; Children; Youth; Economics of Gender; Non-labor Discrimination; Time Allocation and Labor Supply
    Scope: 1 Online-Ressource, illustrations (black and white)
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  10. The Effects of the 2021 Child Tax Credit on Parents' Psychological Well-Being
    Author: Gennetian, Lisa A.; Gassman-Pines, Anna
    Published: July 2024
    Publisher:  National Bureau of Economic Research, Cambridge, Mass

    Although improving psychological well-being was not the explicit focus of the 2021 expanded Child Tax Credit (CTC), psychological health outcomes may have been affected by the positive income shocks generated by the credit. In this chapter we ask:... more

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    Although improving psychological well-being was not the explicit focus of the 2021 expanded Child Tax Credit (CTC), psychological health outcomes may have been affected by the positive income shocks generated by the credit. In this chapter we ask: How did the 2021 expanded CTC affect parents' psychological well-being? Some studies have found that the CTC led to reductions in parental reports of clinical levels of depression and anxiety and in subclinical depressive and anxiety symptoms. Using similar methods, other studies have found no effect on these same outcomes. Importantly, however, the evidence does not point to the CTC worsening psychological well-being. We conclude that the evidence so far is thin, narrow, and mixed, even when our review is expanded to comparable studies on the impact of income support. Alignment of policy objectives with a broader range of measurement approaches will be important in building a more conclusive evidence base

     
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    Source: Union catalogues
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    Series: NBER working paper series ; no. w32662
    Subjects: Familienleistungsausgleich; Wirkungsanalyse; Eltern; Mental Health; USA; Household; Welfare, Well-Being, and Poverty; Public Policy
    Scope: 1 Online-Ressource, illustrations (black and white)
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  11. Beliefs About the Economy are Excessively Sensitive to Household-Level Shocks
    Evidence from Linked Survey and Administrative Data
    Author: Taubinsky, Dmitry; Butera, Luigi; Saccarola, Matteo; Lian, Chen
    Published: July 2024
    Publisher:  National Bureau of Economic Research, Cambridge, Mass

    We study how people's beliefs about the economy covary with household-level events, utilizing a unique link between Danish administrative data and a large-scale survey of consumer expectations. We find that compared to actual inflation, people's... more

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    We study how people's beliefs about the economy covary with household-level events, utilizing a unique link between Danish administrative data and a large-scale survey of consumer expectations. We find that compared to actual inflation, people's inflation forecasts covary much more strongly (and negatively) with both recently realized household income changes and measures of expected future household income changes. We formally establish that these findings are stark deviations from the Bayesian limited-information rational expectations (LIRE) benchmark. Similar results hold for perceptions of past inflation ("backcasts"), suggesting that imperfect recall is a key mechanism for biased forecasts. Building on this, a series of additional tests, some of which utilize data on adverse health events, suggests that the forecast biases are at least partly due to selective recall cued by affective associations. That is, negative (positive) household-level events cue negative (positive) recollections, which lead to pessimistic (optimistic) forecasts

     
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    Source: Union catalogues
    Language: English
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    Series: NBER working paper series ; no. w32664
    Subjects: Inflationserwartung; Privater Haushalt; Verbrauchervertrauensindex; Meinung; Prognose; Systematischer Fehler; Dänemark; General; General; Macro-Based Behavioral Economics; General; Household Finance; Household
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