Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80811
Authors: 
Basten, Christoph
Fagereng, Andreas
Telle, Kjetil
Year of Publication: 
2012
Series/Report no.: 
KOF Working Papers, KOF Swiss Economic Institute, ETH Zurich 298
Abstract: 
Using administrative panel data from Norway, we investigate the development of household labor income, financial wealth and asset holdings over a nine-year period surrounding job loss. Consistent with a simple theoretical model, the data show precautionary saving and a shift toward safer assets in the years leading up to unemployment, and depletion of savings during unemployment. This suggests that at least some households can foresee and prepare for upcoming unemployment, which indicates that private savings can to some extent serve as a substitute for publicly provided unemployment insurance.
Subjects: 
unemployment
precautionary saving
consumption smoothing
household portfolios
portfolio allocation
optimal unemployment insurance
JEL: 
D12
E21
E24
G11
J65
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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