(2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states …, short-term as well as long-term unemployment. This allows us to examine the effects of persistence in the unemployment … process on portfolio choice. Our main findings are, first, that in case of short-term unemployment only, social security …

persistence. -- Precautionary savings ; unemployment insurance ; long-term unemployment ; income uncertainty … (2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states …, short-term as well as long-term unemployment. This allows us to examine the effects of persistence in the unemployment …

Households can rely on private savings or on public unemployment insurance to hedge against the risk of becoming …-term unemployment and find that, in case of short-term unemployment, unemployment insurance offsets the negative impact of unemployment … effects of unemployment on the portfolio choice of households in the US and in Germany. We distinguish short- and long …