2016/03/01 by CHRISTOPH BASTEN, Christoph Basten, ANDREAS FAGERENG +3 · 52 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Asset (computer security) #Economics #Finance #Financial Literacy, Pension, Retirement Analysis #Housing Market and Economics #Housing, Finance, and Neoliberalism #Job loss #Labour economics #Macroeconomics #Market liquidity #Monetary economics #Panel data #Portfolio #Precautionary savings #SAFER #Unemployment
paper · doi:10.1111/jmcb.12301
published in Journal of money credit and banking 48(2-3), 293-324 (Wiley)
openalex publication_date 2016/03/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We investigate the development of household labor income, financial wealth, and asset holdings over a 9‐year period around job loss, using unique administrative panel data from Norway. Consistent with predictions from theory, the data show additional saving and a shift toward safer assets in the years leading up to unemployment, and depletion of savings after job loss. In the years after job loss, the households' after‐tax labor income is reduced by about USD 12,500. Over the same time period, households deplete USD 3,000 of their financial assets, of which one third is accumulated prior to the job loss. This suggests that at least some households can foresee and prepare for the upcoming unemployment, which indicates that private savings can, to some extent, serve as a substitute for publicly provided unemployment insurance.