Working Papers

Windfall Gains and Stock Market Participation                  Conditionally accepted at the Journal of Financial Economics
(with  David Cesarini,  Erik Lindqvist and Robert Östling)
We estimate the causal effect of wealth on participation in several asset markets using data on Swedish lottery players. A $150,000 windfall gain increases stock ownership probability by 12 percentage points among pre-lottery nonparticipants, with no discernible effect on pre-lottery stock owners. The effect is immediate, heterogeneous in intuitive ways, and smaller than predicted by a plausibly calibrated lifecycle model. Additional analyses suggest limited roles for real estate, debt, and procrastination. However, many players eschew equities for bonds, especially following periods of negative equity returns. Overall, results suggest that "nonstandard" beliefs or preferences contribute to equity nonparticipation across many demographic groups.


Long Term Care Utility and Late in Life Saving                                                Accepted at the Journal of Political Economy
(with John Ameriks, Andrew Caplin, Matthew Shapiro, and Chris Tonetti )
Older wealthholders spend down assets slowly. To study this pattern, the paper introduces health dependent utility into a model in which different preferences for bequests, expenditures when in need of long-term care (LTC), and ordinary consumption combine with health and longevity uncertainty to determine saving behavior. To help separately identify motives, it develops Strategic Survey Questions (SSQs) that elicit stated preferences. The model is estimated using new SSQ and wealth data from the Vanguard Research Initiative. Estimates of the health-state utility function imply that motives associated with LTC are significantly more important than bequest motives in determining late in life saving.


Late-in-Life Risks and the Under-Insurance Puzzle
(with John Ameriks, Andrew Caplin, Matthew Shapiro, and Chris Tonetti)
Individuals face significant late-in-life risks, including potential long-term care (LTC) needs. Yet they hold little corresponding insurance (LTCI). We investigate the degree to which a fundamental lack of interest, poor product features, and possible behavioral factors determine low LTCI holdings. We estimate a rich set of individual-level preferences and use a life-cycle model to find that ideal insurance would be far more widely held than are products in the market. We find that  laws in existing products provide only a partial explanation for this under-insurance puzzle, with analogous findings for the gap between estimated and actual annuity holdings. Our results derive from “strategic survey questions” that identify preferences as well as stated demand questions.


Older Americans Would Work Longer If Jobs Were Flexible                                         Forthcoming at AEJ: Macro 

(with John Ameriks, Andrew Caplin, Minjoon Lee, Chris Tonetti, and Matthew Shapiro)
Older Americans, even those who are long retired, have strong willingness to work, especially in jobs with flexible schedules. For many, labor force participation near or after normal retirement age is limited more by a lack of acceptable job opportunities or low expectations about finding them than by unwillingness to work longer. This paper establishes these findings using an approach to identification based on strategic survey questions (SSQs) purpose-designed to  complement behavioral data.  These findings suggest that demand-side factors are important in explaining late-in-life labor market behavior and may be the most appropriate target for policy aimed at promoting working longer.


Introducing the Distributional Financial Accounts of the United States 

(with Mike Batty, Jesse Bricker, Liz Holmquist, Susan McIntosh, Kevin Moore, Eric Nielsen, Sarah Reber, Molly Shatto, Kamila Sommer, Tom Sweeney, and Alice Henriques Volz)

Link to data
This paper describes the construction of the Distributional Financial Accounts (DFAs),a new dataset containing quarterly estimates of the distribution of U.S. household wealth since 1989, and provides the first look at the resulting data. The DFAs build on two existing Federal Reserve Board statistical products — quarterly aggregate measures of household wealth from the Financial Accounts of the United States and triennial wealth distribution measures from the Survey of Consumer Finances — to incorporate distributional information into a national accounting framework. The DFAs complement other existing sources of data on the wealth distribution by using a more comprehensive measure of household wealth and by providing quarterly data on a timely basis. We encourage policymakers, researchers, and other interested parties to use the DFAs to help understand issues related to the distribution of U.S. household wealth.


In Progress

​Wealth and the Propensity to Take Risk
(with David Cesarini,  Erik Lindqvist, and Robert Östling

​Risky Insurance
(with Chris Tonetti)
A Survey Approach to External Validation
(with Andrew Caplin, Søren Leth-Petersen, Chris Tonetti and Gianluca Violante)

​The Effect of Wealth on Worker Productivity: Evidence From Professional Golf Tournaments

Due Diligence: Job Search with Rationally Inattentive Workers
(with  Andrew Caplin, Daniel Martin, and Chris Tonetti)

The Precautionary Transfer Motive
(with John Ameriks, Andrew Caplin, Mi Luo, and Chris Tonetti)