Research
Publication
Education and Persistence of Earnings Shocks. Joint with Chiara Dal Bianco. Economics Letters, 196 (2020). https://doi.org/10.1016/j.econlet.2020.109527
Ongoing Projects
Financial distress during the pandemic: the role of government support. Joint with Guglielmo Weber and Nancy Zambon (R&R)
Abstract: We investigate the effect of COVID-19-related government support intervention on the financial condition of Europeans aged 50 or above. We use the information provided by both SHARE Corona Surveys and SHARE regular Waves. We define a composite household financial distress indicator and investigate its variation between mid-2020 and mid-2021. Our findings suggest a positive correlation between increased financial distress and receipt of government support, pointing to the presence of reverse causality. To identify the causal effect of financial support policies, we adopt an instrumental variable strategy. We find that households with at least one respondent employed in a COVID-19-sensitive industry or facing job disruptions during the first wave of the pandemic are significantly more likely to receive government financial support, and this support successfully alleviates household financial distress.
Households risk preferences and portfolio allocation: a collective approach
Abstract: This work investigates the decision-making process of households' portfolio allocation using the English Longitudinal Study of Ageing data. I develop a collective portfolio choice model where households decide about stock market participation and then choose the optimal allocation. The model accounts for household risk tolerance, measured as a weighted sum of the household members' risk preferences. I study the determinants of the household portfolio using the Heckman approach to control for selection into participation. The results show that household risk preferences affect portfolio allocation but not stock market participation. Last, comparing the collective and the standard unitary model, I show that the former approach fits significantly better the data.
Subjective Survival Beliefs, Cognitive Skills and Investments in Risky Assets. Joint with Chiara Dal Bianco, Francesca Parodi and Guglielmo Weber
Abstract: We document that the underestimation of subjective survival probabilities negatively affects investments in risky assets in the UK context. We then explore the role of cognitive skills in explaining this negative relationship. More precisely, we disentangle a direct effect of cognitive skills on investments in risky assets through entry costs and an indirect effect through survival probability underestimation. We calibrate a life-cycle model to quantify the importance of survival probability underestimation on suboptimal ownership of risky assets. We use the model to evaluate the potential effects of policy interventions aimed at increasing financial literacy. These policy interventions affect the decision to own risky assets by reducing entry costs, but also by reducing survival risk underestimation.
Saving and Spending Regrets at Retirement. Joint with Stefano Castaldo, Martina Celidoni, Nancy Zambon
Abstract: In this paper, we study how retirement affects the individual’s saving/spending regrets. Using the second wave of the SHARE Corona survey we find that newly retired people are more likely to report no regrets and less likely to exhibit saving regrets than workers. Heterogeneity analyses show that the effect of retirement is more pronounced post-pandemic, in countries with pension systems that impose more demanding pension access criteria, and among those with limited financial literacy. Lastly, early retirees and statutory retirees exhibit opposite effects of retirement: while the former report higher saving regrets at retirement, the latter have a lower propensity in showing saving regrets at that time.
The caregiving penalty at retirement. Joint with Paola Profeta
Other refereed publications
"Effects of Covid-related economic support on households financial distress", joint with Debdeep Chattopadhyay , Greta Pesaresi and Guglielmo Weber (2023). In Axel Börsch-Supan, Agnieszka Chłoń-Domińczak, Anita Abramowska-Kmon, Florence Jusot, Šime Smolić, Karen Andersen-Ranberg, Agar Brugiavini, Guglielmo Weber, Howard Litwin, Life of people aged 50+ during the Covid-19 pandemic: First results from the SHARE Corona Surveys.