Annasofie M. Olesen

Research 

Work in progress

"Fast Solution of Dynamic Intra-Household Bargaining Models",  Revise and resubmit, Quantitative Economics, with Adam Hallengreen and Thomas H. Jørgensen
[working paper]    [slides]

Dynamic household bargaining models are growing in popularity but are computationally demanding to solve and estimate. We propose a modification to the endogenous grid method (EGM) that allows this class of models to reap the benefits of the EGM. The method, which we refer to as interpolated EGM (iEGM), precomputes optimal intertemporal consumption as a function of the expected marginal value of wealth before solving the dynamic bargaining model. We illustrate the implementation of the iEGM in a simple example, where the iEGM is around 20 times faster than standard value function iterations. In a more complex quantitative model it is about 50 times faster, without compromising accuracy. We apply the iEGM to a rich household model to study how productivity shocks affect consumption inequality. Our results suggest that the degree of commitment of household members can affect the consequences of individual labor productivity shocks, such as e.g. skill-biased technological change.

"Gender Pension Gaps and their Implications for Late Divorce"
with Amelie Mennerich

Over the past two decades, the likelihood of divorce after age 50 has doubled. This means that divorce is increasingly occurring at ages when accumulated pension wealth constitutes a large share of household resources and gender gaps are significant. Given the large variation across countries in whether and how pension wealth differences are compensated in divorce, this raises the question of how well individuals are insured against the financial consequences of grey divorce. Using administrative data from Denmark, a country that treats pension wealth as separate property, we show that divorce is associated with delayed retirement for women in particular. We then build a dynamic structural model of household bargaining, divorce and retirement explore what insurance mechanisms divorcees use to mitigate the impact on consumption in retirement and how this interacts with counterfactual policies for the division of pension wealth. We find that compensation of pension wealth differences in liquid assets only has a small effect on the retirement of divorced women while instead being used to smooth out consumption around divorce. In contrast, in-kind division of pension wealth causes earlier retirement of divorced women. When state pension benefits are means tested, in-kind pension sharing also reduces divorced women's reliance on public pensions by increasing their private pension income. 

"Social Insurance in Older Couples"
with Amelie Mennerich

Social insurance programs often make benefits a function of household size, to account for economies of scale in consumption of couples. Due to endogeneity problems, empirical estimates of responses to such policy design are sparse. This paper aims to fill the gap by exploiting variation around exogenous age thresholds in a state pension with this feature. In response to a near-universal change in incentives to living alone, we estimate an increase in the share living alone of 0.2% pt (0.8%). This is driven by a permanent 5% fall in new cohabitation starts and a one-off 20% spike in the risk of separation and divorce. The findings are robust to controlling for kinks in mortality, timing of actual retirement, and we find little evidence of fraud. 

"Household Responses to Chronic Illness in Children: A Gendered Perspective" [poster]

Teaching

• Teaching Assistant in the BSc/MSc elective Introduction to Programming and Numerical Analysis, University of Copenhagen (Spring 2023, spring 2024)