Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81867
Authors: 
Betermier, Sebastien
Jansson, Thomas
Parlour, Christine A.
Walden, Johan
Year of Publication: 
2011
Series/Report no.: 
Sveriges Riksbank Working Paper Series 255
Abstract: 
We use a detailed panel data set of Swedish households to investigate the relation between their labor income risk and financial investment decisions. In particular, we relate changes in wage volatility to changes in the portfolio holdings for households that switched industries between 1999 and 2002. We find that households do adjust their portfolio holdings when switching jobs, which is consistent with the idea that households hedge their human capital risk in the stock market. The results are statistically and economically significant. A household going from an industry with low wage volatility to one with high volatility will ceteris paribus decrease its portfolio share of risky assets by up to 35%, or USD 15,575.
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.