Saving for Retirement with Job Loss Risk
This article studies a tractable theoretical model of optimal consumption and saving decisions with endogenous retirement. Particular attention is paid to the impact of an increase in the risk of losing one’s job on the optimal path of consumption and wealth accumulation. Even if one does not actually lose their job, an increase in the risk of a job loss is by itself sufficient to cause lower consumption, higher saving, and, through faster retirement, lower labor supply.
Volume (Year): (2013)
Issue (Month): 1Q ()
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- Marcet, Albert & Obiols-Homs, Francesc & Weil, Philippe, 2007.
"Incomplete markets, labor supply and capital accumulation,"
Journal of Monetary Economics,
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- Albert Marcet & Francesc Obiols-Homs & Philippe Weil, 2002. "Incomplete markets, labor supply and capital accumulation," Economics Working Papers 659, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2003.
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- Albert Marcet & Francesc Obiols-Homs & Philippe Weil, 2007. "Incomplete Markets, Labor Supply and Capital Accumulation," Sciences Po publications info:hdl:2441/8623, Sciences Po.
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- Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1. Full references (including those not matched with items on IDEAS)
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