Over the last couple of decades there have been unprecedented, and to some extent unexpected, increases in life expectancy which have raised important concerns for retirement savings and for the affordability of defined-benefit pension plans. We address questions concerning these topics by...

We analyze the returns to education in a life-cycle framework that incorporates risk preferences, earnings volatility (including unemployment), and a progressive income tax and social insurance system. We show that such a framework significantly reduces the measured gains from education relative...

This paper estimates the cross-sectional distribution of Epstein-Zin preference parameters in a Large administrative panel of Swedish households. We consider a life-cycle model of saving and portfolio choice that incorporates risky labor income, safe and risky financial assets inside and outside...

Consistent with a simple model of market segmentation, we document rating-based clientele effects in the corporate bond market. Supply shocks arising from idiosyncratic firm upgrades and downgrades cause significant price movements for the other bonds in both the affected rating bucket and...

The existing literature has documented “reaching for yield”—the phenomenon of investing more in risky assets when interest rates are lower—among institutional investors. Using detailed transaction data from a large brokerage firm, we provide direct field evidence that reach for yield is...

In the U.S. student debt currently represents the second largest component of consumer debt, just after mortgage loans. Repayment of those loans reduces disposable income early in their life cycle when marginal utility is particularly high, and limits households' ability to build a buffer stock...

This paper estimates the cross-sectional distribution of Epstein-Zin preferences using the wealth and risky portfolio shares of a large panel of Swedish households. We find heterogeneous risk aversion (a standard deviation of 1.06 with a mean/median of 7.57/7.50), time preference rate (standard...

Governments are known for procrastinating when it comes to resolving painful policy problems. Whatever the political motives for waiting to decide, procrastination distorts economic decisions relative to what would arise with early policy resolution. In so doing, they engender excess burden....