If household portfolios are constrained by borrowing and short-sales restrictions asset markets, then alternative retirement savings systems may affect household welfare by relaxing these constraints. This paper uses a calibrated partial-equilibrium model of optimal life-cycle portfolio choice...

We use a long panel with information on expected and realized changes in household finances to study the process of expectation formation and expectation errors, controlling for individual fixed effects. We find that, following improvements in financial situation, individuals tend to form...