or long-term unemployment, may occur during working years. Personal disaster risk alters lifetime ex-ante investment …This paper examines households' self-insurance in financial markets when a rare personal disaster, such as disability … choices, even if most workers will not experience a disaster. Uncertainty about the size of human capital losses, which …

potentially large permanent shock to earnings. Personal disaster risk allows to match moderate risk-taking of young investors and … personal disaster, such as long-term unemployment or disability, during working years. Such a disaster entails an uncertain but … a flat investment profile in age, observed in the United States, when the calibration of both the disaster probability …

To effectively cope with an unexpected, large, and negative income shock, I propose a life-cycle model for income risk … generalizing the Arrow-Debreu price with income risk premium …

consistent with theories that emphasize globally shared disaster risk and time-varying disaster risk as important driving forces …This paper examines whether rare disaster can predict stock returns. We construct an aggregate rare disaster index by … imposing the partial least square (PLS) approach on six news-implied rare disaster proxies of Manela and Moreira (2017). Our …

We propose a news-implied rare disaster risk indicator and study its predictive power on the returns of U.S. Treasury … not spanned by the current yield curve. The disaster risk factor delivers a counter cycle bond risk premium, and the … predictability of disaster risk is more significant during periods of economic downturn. Our empirical findings show that disaster …

labor-income risk can explain much of this risk-taking pattern. Uncontrollable labor-income risk stresses middle …, middle-income households reduce (controllable) financial risk. Richer households, having less pressure, can afford more risk …-taking. The poor take low risk because they avoid jeopardizing their subsistence consumption. …