(2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states … systems as those established in the EU are able to offset the negative impact of unemployment risk on the portfolio …

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 … systems as those established in the EU are able to offset the negative impact of unemployment risk on the portfolio …

Households can rely on private savings or on public unemployment insurance to hedge against the risk of becoming … risk on households’ equity holdings. When incorporating long-term unemployment, the US-equity share drops. This negative … significantly alter portfolio decisions. We show that different responses of portfolios to unemployment risk can be attributed to …

(2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states … systems as those established in the EU are able to offset the negative impact of unemployment risk on the portfolio …

market risk when they approach retirement. The authors show how long-run labor income risk helps explain this evidence …. Moreover, they discuss the effect of long-run labor income risk on the valuation of pension plan obligations, their funding … savings in stocks. In contrast, a significant fraction of U.S. households do not hold stocks. Investors typically hold very …

(2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states … systems as those established in the EU are able to offset the negative impact of unemployment risk on the portfolio …

Households can rely on private savings or on public unemployment insurance to hedge against the risk of becoming … risk on households' equity holdings. When incorporating long-term unemployment, the US-equity share drops. This negative … significantly alter portfolio decisions. We show that different responses of portfolios to unemployment risk can be attributed to …

theory suggests that with increasing labor income risk, the reluctance of households to hold stocks increases. We propose to … measure income risk as the observed variation of household income over a five year period. We find that indeed higher income … risk reduces the propensity to invest in stocks. However, when controlling for household heterogeneity as well as …