TY  - UNPD
A1  - Hubar, Sylwia
A1  - Koulovatianos, Christos
A1  - Li, Jian
T1  - The role of labor-income risk in household risk-taking
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 640
N2  - In fifteen European countries, China, and the US, stocks and business equity as a share of total household assets are represented by an increasing and convex function of income/wealth. A parsimonious model fitted to the data shows why background labor- income risk can explain much of this risk-taking pattern. Uncontrollable labor-income risk stresses middle-income households more because labor income is a larger fraction of their total lifetime resources compared with the rich. In response, middle-income households re-duce (controllable) financial risk. Richer households, having less pressure, can afford more risk-taking. The poor take low risk because they avoid jeopardizing their subsistence consumption.
T3  - CFS working paper series - 640 
KW  - background risk
KW  - household-portfolio shares
KW  - business equity
KW  - subsistence consumption
KW  - wealth inequality
Y1  - 2020
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/53457
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-534571
UR  - https://ssrn.com/abstract=3660935
IS  - June 28, 2020
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -