Research

Working Papers

Housing and Savings Behavior across Family Types (Job Market Paper)

R&R Review of Economic Studies

Does marital status affect households' investment choices? Is accounting for distinct family types necessary for the correct evaluation of policies that aim at stimulating housing demand? To answer these questions, I develop a life-cycle model of housing and financial portfolio choice with dynamic and heterogeneous family types. I find that divorce risk encourages precautionary savings of couples in the form of liquid assets and reduces their demand for illiquid housing. Expected marriage, low income levels and larger exposure to income fluctuations prevent singles from becoming homeowners. Abstracting from distinct family types amplifies the attractiveness of housing and, as a result, overstates the effectiveness of housing policies such as lowering property taxes and reducing transaction costs by a factor greater than two. This mis-specification is largest for young households who are most likely to be single and whose marital transition risk is highest. In contrast, regulations that facilitate stock market participation help to foster wealth accumulation, because they encourage investment in high return assets that are cheaper to liquidate in the event of a (marital or labor income) shock.

The Gender Investment Gap over the Life-Cycle

R&R Review of Financial Studies

Single women hold less risky portfolios than single men. This paper analyzes the determinants of the “gender investment gap” based on a structural life-cycle framework. The model rationalizes the investment gap without gender heterogeneity in preferences. Rather, lower deterministic income and larger household sizes of single women are the main determinants of the gap. Gender heterogeneity in deterministic income matters because women earn less on average (level effect) and because the income gap is largest early in life, preventing young single women from entering the stock market, thereby perpetuating differences in wealth and participation rates later on (slope effect).

Awarded best paper by a graduate student at GRAPE Gender Gaps Conference 2021, the 2021 EFA Doctoral Tutorial Best Paper Prize, and the 13th UniCredit Foundation Best Paper Award in Gender Economics.

Previous Version available as HOFIMAR working paper.

Joint Search over the Life-Cycle

(with Philipp Grübener and Lukas Nord)

Selected for presentation at the 2024 Carnegie-Rochester-NYU Conference on Public Policy

This paper provides novel evidence that the added worker effect – labor force entry upon spousal job loss – is substantially stronger for young than old households. Using a life cycle model of two-member households in a frictional labor market, we study whether this age-dependency is driven by heterogeneous needs for or availability of spousal insurance. Our framework endogenizes asset and human capital accumulation, as well as arrival rates of job offers, and is disciplined against US micro data. By means of counterfactuals, we find a strong complementarity across both margins: A large added worker effect requires both high spousal earnings potential (human capital) relative to the primary earner and limited access to other means of self insurance (assets). Either one individually does not generate a sizable response of spousal labor supply to the job loss of a primary earner, but their interaction can account for the observed age differential in the added worker effect.