Junyi Zhu - Research

Curriculum Vitae
Email: junyi.zhu@bundesbank.de OR iamthr AT gmail.com

Interests: wealth and income distributions, sorting in search-matching, measurement in household surveys, intergenerational transfer, redistribution through fiscal and monetary policies and general labor and public economics topics

Active Working Paper

As capital is regaining the importance in rich countries, dynamics of wealth inequalities are more affected by the inheritance distribution. The relative attraction derived from inherited wealth and acquired human capital in marital choices may be undergoing a change. We expand the traditional dimension of assortative mating through only labor income to both labor income and inheritance. This paper studies the concentration and substitutability of these two traits in forming partnership using Panel on Household Finance (PHF) data for Germany. Relative to France, Germany's aristocratic wealth has experienced more negative shocks since WWII, social stratification is perceived as less acute, and half of the country went through decades of communism. However, our results come quantitatively close to the distributional outcomes from France. By assuming a sequential revelation of inheritance and labor income in marital sorting, we develop a stylized multidimensional matching model which adequately replicates the sorting pattern observed using marginal distributions of these two traits from either gender. Our estimate suggests inheritance is about two and a half times more important than labor income for explaining marriage choice. This quantitative result seems to characterise the expected lifetime inheritance and labor income after marriage for Germany under the actual rate of return, growth rate, demographics as well as fast expanding bequest flows in the recent history.
InterviewDer Spiegel

Extrapolating the income and wealth distributions – a joint distributional approach, with Viktor Steiner, May 2017.
We use the marginal and bivariate parametric distributions to extrapolate both income and wealth distributions. Evaluation is performed by comparing the top marginal distributions using either marginal or joint approaches. We further introduce the observed top distributions from income tax statistics and manager magazines for validation as well as estimation purposes. Two aspects of questions can be answered by using the extrapolated distributions: simulation studies on taxation policies (interaction between capital and labor income taxes as demanded by inflation driven bargaining, capital income or wealth taxation); whether differences in saving rate or rates of return are shaping the wealth inequality.

The PHF (Panel on Household Finance) questionnaire offers a couple of flexibility in answering the income information, especially choosing between gross and net values. We have developed a tax microsimulation model for the standardization (converting between gross and net) and imputation. The survey also collects a total monthly household disposable income as many general purpose surveys do. This paper documents our microsimulation model by showing the effectiveness of this innovation in collecting income through surveys and implementation by incorporating the unique tax class choice in German unfront income tax system. We then evaluate the data quality and potential contribution from this innovation by comparing the distributions from ours and a counterfactual asking only gross incomes as commonly done by other surveys. We also compare the difference between the disposable incomes derived by tax microsimulation and aggregation and the single self-reported one. Both comparisons reveal the disagreements appearing to be correlated with the income tax schedule and become significant in most progressive area of the distribution. 

Refereed Publications

Bracket Creep Revisited - With and Without r>g: Evidence from Germany, July 2015, 

studies the redistributive effects of of bracket creep in Germany using a tax microsimulation model developed for the 2009 income distribution from the new PHF data. The simulation yields an inverted U-shaped overall redistributive effect of the tax system with respect to the inflation rate. Under r>g, the flat capital income tax introduced in 2009 can further reduce the redistribution even under pro-poor inflation compensation mechanism. Journal of Income Distribution 23, no. 3 (2014): 106-158.

CoverageSwiss Federal Council's Report (Bericht des Bundesrates)

Price Level Changes and the Redistribution of Nominal Wealth Across the Euro Area, with Adam, Klaus, April 2014,
shows that unexpected movements in the general price level induce sizable wealth redistribution within the Euro Area. We document which countries win and lose and how gains and losses spread across households. Data appendix is available 
Journal of the European Economic Association 14, no. 4 (2016): 871-906.

Household saving behaviour and credit constraints in the Euro area, with Julia Le Blanc, Alessandro Porpiglia, Federica Teppa and Michael Ziegelmeyer, June 2014,

studies the role of household saving behaviour, of individual motives for saving and that of perceived liquidity constraints in 15 Euro Area countries based on the Household Finance and Consumption Survey. Despite the difficulty to reach strong conclusions due to the crisis interference, we find evidence of some degree of homogeneity across countries for the saving preferences and the relative importance of different motives for saving. International Journal of Central Banking 12 no. 2 (2016): 15-69

Working Paper/Discussion Paper

Multiple imputation in a complex household survey - the German Panel on Household Finances (PHF): challenges and solutions, with Eisele, Martin, December 2013,
presents a case study of the imputation in a complex household survey - the first wave of the German Panel on Household Finances (PHF). Our model selection procedure adopts the techniques for the out-of-sample prediction to handle the overfitting problem. We also take the measures to produce ex ante evaluation for modelling.


The PHF: A comprehensive panel survey on household finances and wealth in Germany, with Ulf von Kalckreuth, Martin Eisele, Julia Le Blanc and Tobias Schmidt, Discussion Paper, Deutsche Bundesbank 13/2012,

introduces the survey of the Panel on Household Finances (PHF), highlights its main methodological features and presents initial results.


Saving and learning: Theory and evidence from saving for child's college, Discussion Paper, Deutsche Bundesbank 21/2012,

analyzes the main uncertainty of college saving - the child's ability - in the context of the saving with learning model. We develop a dynamic model to explain the parents' saving behavior when they are confronted with the real option of college choice. We also test the implications of the model from the Panel Study of Income Dynamics/Child Development Supplement & Transition into Adulthood (PSID/CDS & TA) (1997-2005).