Saving and portfolio allocation before and after job loss

Christoph Basten, Andreas Fagereng and Kjetil Telle

No 12-298, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: Using administrative panel data from Norway, we investigate the development of household labor income, nancial wealth and asset holdings over a nine-year period surrounding job loss. Consistent with a simple theoretical model, the data show precautionary saving and a shift toward safer assets in the years leading up to unemployment, and depletion of savings during unemployment. This suggests that at least some households can foresee and prepare for upcoming unemployment, which indicates that private savings can to some extent serve as a substitute for publicly provided unemployment insurance.

Keywords: Unemployment; Precautionary saving; Consumption smoothing; Household portfolios; Portfolio allocation; Optimal unemployment insurance (search for similar items in EconPapers)
Pages: 48 pages
Date: 2012-02
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Citations: View citations in EconPapers (10)

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http://dx.doi.org/10.3929/ethz-a-006999200 (application/pdf)

Related works:
Journal Article: Saving and Portfolio Allocation Before and After Job Loss (2016)
Working Paper: Saving and portfolio allocation before and after job loss (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:kof:wpskof:12-298

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