We ask why so few student loan borrowers enroll in Income Driven Repayment when the majority would benefit from doing …

the bankruptcy decision or not. For the strategic timing theory such decisions are endogenous, while for the adverse … events theory they are not. Hausman tests for endogeneity show that financial benefit, unsecured debt, and non-exempt assets … are exogenous with the bankruptcy decision, consistent with the adverse events theory …

theory of unsecured credit account for the high volatility and procyclicality of credit and the high volatility and … countercyclical earnings risk (i.e., rather than having all households fare slightly worse than normal during recessions, we ensure … bankruptcy risk discouraging households from using credit. This finding contradicts the intuition that access to credit helps …

facing uninsurable idiosyncratic labor income risk. The Ramsey government internalizes the general equilibrium feedback of … optimal aggregate saving rate is independent of income risk. The optimal time-invariant tax on capital is increasing in income … that the optimal steady state saving rate is increasing in income risk if and only if the intertemporal elasticity of …

unconditional cross-sectional moments of household consumption growth and the moments of the risk-free rate, equity premium, price …-dividend ratio, and aggregate dividend and consumption growth. The model-implied risk-free rate and price-dividend ratio are … procyclical while the market return has countercyclical mean and variance. Finally, household consumption risk explains the cross …

In this paper we argue that very high marginal labor income tax rates are an effective tool for social insurance even … labor productivity risk, show that it has a wealth distribution that matches the data well, and then use it to characterize …

This paper studies the cyclical nature of individual income risk using a confidential dataset from the U.S. Social … average earnings (which is not the case during expansions). Finally, we find that the cyclical nature of income risk is … individual income growth during recessions into "between-group" and "within-group" components. We begin with the behavior of …

choices over the life cycle. We start by analyzing the theoretical impact of income changes on consumption - highlighting the … contributions, distinguishing between papers that use only income data and those that use both income and consumption data. The … and identify the income process or the information set of the individuals. Second, one can assume that the income process …

This paper models a firm's rollover risk generated by conflict of interest between debt and equity holders. When the …