TY  - UNPD
A1  - Chai, Jingjing
A1  - Maurer, Raimond
A1  - Mitchell, Olivia S.
A1  - Rogalla, Ralph
T1  - Lifecycle impacts of the financial and economic crisis on household optimal consumption, portfolio choice, and labor supply
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2011,23
N2  - The direct financial impact of the financial crisis has been to deal a heavy blow to investment-based pensions; many workers lost a substantial portion of their retirement saving. The financial sector implosion produced an economic crisis for the rest of the economy via high unemployment and reduced labor earnings, which reduced household contributions to Social Security and some private pensions. Our research asks which types of individuals were most affected by these dual financial and economic shocks, and it also explores how people may react by changing their consumption, saving and investment, work and retirement, and annuitization decisions. We do so with a realistically calibrated lifecycle framework allowing for time-varying investment opportunities and countercyclical risky labor income dynamics. We show that households near retirement will reduce both short- and long-term consumption, boost work effort, and defer retirement. Younger cohorts will initially reduce their work hours, consumption, saving, and equity exposure; later in life, they will work more, retire later, consume less, invest more in stocks, save more, and reduce their demand for private annuities. Keywords: Financial Crisis , Household Finance , Cycle Portfolio Choice , Labor Supply Classification: D1, G11, G23, G35, J14, J26, J32
T3  - CFS working paper series - 2011, 23 
KW  - Financial Crisis
KW  - Household Finance
KW  - Cycle Portfolio Choice
KW  - Labor Supply
Y1  - 2011
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/22755
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-115892
IS  - September 21, 2011
ER  -