While in the data wealth is concentrated in the hands of a small number of rich people and the saving rate of the rich is high, many models used for quantitative policy evaluation fail to match these facts. In addition, some of the models that succeed in matching these facts have radically...

There is a common perception that households are under-saving for retirement - indeed this has motivated many recent policy reforms in the UK. In this paper we use a structural model, specified to closely match the UK policy environment, to investigate this ‘fact' for the cohort born in the...

We document and study international differences in both ownership and holdings of stocks, private businesses, homes, and mortgages among households aged fifty or more in thirteen countries, using new and comparable survey data. We employ counter-factual techniques to decompose observed...

This paper provides the first joint analysis of household stockholding participation, location among stockholding modes, and participation spillovers. Our model matches observed participation, conditional and unconditional, and asset location patterns. We find that financial sophistication...

Using U.K. microeconomic data, we analyze the empirical determinants of voluntary annuity market demand. We find that annuity market participation increases with financial wealth, life expectancy and education and decreases with other pension income and a possible bequest motive for surviving...

Using U.K. microeconomic data, we analyze the empirical determinants of participation in the life insurance market. We find that term insurance demand is positively correlated with measures of bequest motives like being married, having children and/or subjective measures of strong bequest...

This paper explores the interaction between retirement flexibility and portfolio choice in an overlapping - generations model. We analyze this interaction both in a partial - equilibrium and general - equilibrium setting. Retirement flexibility is often seen as a hedge against capital - market...

Debt-induced crises, including the subprime, are usually attributed exclusively to supply-side factors. We examine the role of social influences on debt culture, emanating from perceived average income of peers. Utilizing unique information from a household survey representative of the Dutch...

This paper proposes a structural approach to long-horizon asset allocation. In particular, the investor draws inferences about asset returns from a vector autoregression (VAR) with economic restrictions on the intercept, slope, and covariance matrix implied by the long-run risk model of Bansal...

We characterize the optimal default fund in a defined contribution (DC) pension plan. Using detailed data on individuals and their holdings inside and outside the pension system, we find substantial heterogeneity among default investors in terms of labor income, financial wealth, and stock...