Saving for Retirement with Job Loss Risk
FRB Economic Quarterly, Vol. 99, No. 1, First Quarter 2013, pp. 45-81
37 Pages Posted: 22 Dec 2013
Date Written: 2013
Abstract
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 ones 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.
Suggested Citation: Suggested Citation
Grochulski, Borys and Zhang, Yuzhe, Saving for Retirement with Job Loss Risk (2013). FRB Economic Quarterly, Vol. 99, No. 1, First Quarter 2013, pp. 45-81, Available at SSRN: https://ssrn.com/abstract=2370585
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