incomplete markets model and find that advance information reduces households' income forecast errors by 15%. Our estimation …We investigate whether US households possess advance information about their future income and what this means for … requires only panel data on consumption and income. Using the Panel Study of Income Dynamics, we find-in contrast to the …

The validity of family background variables instrumenting education in income regressions has been much criticized. In … violations of the strong validity assumption affect the estimation results. We show that, in case of moderate direct effects of … instruments in income regressions. …

that estimation outcomes are different between low and high-income countries. Whereas church membership is found to have a … influence of religion on income. The violation of the homogeneity assumption would have two consequences. First, results based … countries. We estimate simultaneously an income and a religion equation to correct for the endogeneity of religiosity. We find …

We investigate the importance of aggregate and consumer-specific or idiosyncratic labour income risk for aggregate … consumption changes in the US over the period 1952-2001. Theoretically, the effect of labour income risk on consumption changes is … aggregate labour income shocks and individual risk is modelled as an unobserved component and obtained through Kalman filtering …