scholarly journals Labor Supply Flexibility and Portfolio Choice in a Life-Cycle Model

10.3386/w3954 ◽  
1992 ◽  
Author(s):  
Zvi Bodie ◽  
Robert Merton ◽  
William Samuelson
Keyword(s):  
Life Cycle ◽  
Labor Supply ◽  
Portfolio Choice ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Supply Flexibility

scholarly journals Labor supply flexibility and portfolio choice in a life cycle model

1992 ◽  
Vol 16 (3-4) ◽  
pp. 427-449 ◽  
Author(s):  
Zvi Bodie ◽  
Robert C. Merton ◽  
William F. Samuelson
Keyword(s):  
Life Cycle ◽  
Labor Supply ◽  
Portfolio Choice ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Supply Flexibility

LIFE INSURANCE AND PENSION CONTRACTS II: THE LIFE CYCLE MODEL WITH RECURSIVE UTILITY

2015 ◽  
Vol 46 (1) ◽  
pp. 71-102 ◽  
Author(s):  
Knut K. Aase
Keyword(s):  
Life Cycle ◽  
Portfolio Choice ◽  
Life Insurance ◽  
Insurance Industry ◽  
Life Time ◽  
Recursive Utility ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Pension Insurance ◽  
The Relationship

AbstractWe analyze optimal consumption and pension insurance during the life time of a consumer using the life cycle model, when the consumer has recursive utility. The relationship between substitution of consumption and risk aversion is highlighted, and clarified by the introduction of this type of preferences. We illustrate how recursive utility can be used to explain the empirical consumption puzzle for aggregates. This indicates a plausible choice for the parameters of the utility function, relevant for the consumer in the life cycle model. Optimal life insurance is considered, as well as the portfolio choice problem related to optimal exposures in risky securities. A major finding is that it is optimal for the typical insurance buyer to smooth adverse shocks to the financial market, unlike what is implied by the conventional model. This has implications for what type of contracts the life and pension insurance industry should offer.

Tax Incidence in a Life Cycle Model with Variable Labor Supply

1979 ◽  
Vol 93 (4) ◽  
pp. 705 ◽  
Author(s):  
Laurence J. Kotlikoff ◽  
Lawrence H. Summers
Keyword(s):  
Life Cycle ◽  
Labor Supply ◽  
Tax Incidence ◽  
Life Cycle Model ◽  
Cycle Model

scholarly journals LIFE INSURANCE AND PENSION CONTRACTS I: THE TIME ADDITIVE LIFE CYCLE MODEL

2014 ◽  
Vol 45 (1) ◽  
pp. 1-47 ◽  
Author(s):  
Knut K. Aase
Keyword(s):  
Life Cycle ◽  
Portfolio Choice ◽  
Life Insurance ◽  
Insurance Industry ◽  
Pension Plans ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Pension Insurance ◽  
Insurance Contracts ◽  
State Dependent

AbstractWe analyze optimal consumption in the life cycle model by introducing life and pension insurance contracts. The model contains a credit market with biometric risk, and market risk via risky securities. This idealized framework enables us to clarify important aspects of life insurance and pension contracts. We find optimal pension plans and life insurance contracts where the benefits are state dependent. We compare these solutions both to the ones of standard actuarial theory, and to policies offered in practice. Implications of this include what role the insurance industry may play to improve welfare. The relationship between substitution of consumption and risk aversion is highlighted in the presence of a consumption puzzle. One problem related portfolio choice is discussed the horizon problem. Finally, we present some comments on longevity risk and cohort risk.

Explaining Changes in Female Labor Supply in a Life-Cycle Model

2008 ◽  
Vol 98 (4) ◽  
pp. 1517-1552 ◽  
Author(s):  
Orazio Attanasio ◽  
Hamish Low ◽  
Virginia Sánchez-Marcos
Keyword(s):  
Life Cycle ◽  
Labor Supply ◽  
Gender Gap ◽  
Female Labor Supply ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Female Labor ◽  
Female Participation ◽  
Cost Of Children ◽  
The Cost

This paper studies the life-cycle labor supply of three cohorts of American women, born in the 1930s, 1940s, and 1950s. We focus on the increase in labor supply of mothers between the 1940s and 1950s cohorts. We construct a life-cycle model of female participation and savings, and calibrate the model to match the behavior of the middle cohort. We investigate which changes in the determinants of labor supply account for the increases in participation early in the life-cycle observed for the youngest cohort. A combination of a reduction in the cost of children alongside a reduction in the wage-gender gap is needed. (JEL D91, J16, J22, J31)

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