We use direct evidence on credit constraints to study their importance for household consumption growth and for welfare. We distentangle the direct effect on consumption growth of a currently binding credit constraint from the indirect effect of a potentially binding credit constraint which...

The aim of this paper is to understand what a recession means for individual consumers, and to model in a life-cycle framework how individuals respond to recessions. Our focus is on the sharp increase in savings rates that have been observed in the current and recent recessions. We show...

We study the life cycle labour force participation of three cohorts of American women: those born in the 1930s, 1940s and 1950s. We document the large shifts in labour supply behaviour among these three cohorts, then use a life cycle model with endogenous female labour force participation,...

We provide a lifecycle framework for comparing the insurance value and the incentive cost of disability benefits. We estimate the risks that individuals face and the parameters governing the disability insurance program using longitudinal US data on consumption, health, disability insurance, and...