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This paper uses a heterogeneous-agent overlapping-generations model to examine the fiscal and distributional consequences of introducing a means test in US Social Security. I find that a means test, that is, conditioning benefit payments on a household's earnings or assets, leads to a higher...
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; Collateral ; Income risk ; Bankruptcy …. Furthermore, we establish two quantitative results. Firstly, modest levels of risk aversion are necessary to match observed debt …
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and price of unsecured debt. -- household debt portfolios ; housing ; collateral ; bankruptcy ; commitment ; income risk …
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Financial markets provide imperfect insurance of labor income risk. However, workers can partly insure against labor … market risk by commuting to adjacent regions. Since commuters own wage claims to output produced in adjacent regions, the … business cycle in the neighborhood becomes a relevant risk factor at the regional level. In our empirical analysis for US …
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