Research
Assistant
Professor
Papers
·
Marriage, Intergenerational Schooling Effect, and
Gender Gap in College Attainment (with Suqin
Ge)
This version: December
2007
One striking phenomenon in the U.S.
·
Consumption
Over the Life Cycle: How Different is Housing?
forthcoming in Review of Economic Dynamics
Micro data over the life cycle shows two
different patterns of consumption of housing and non-housing goods: the
consumption profile of non-housing goods is hump-shaped while the consumption
profile for housing first increases monotonically and then flattens out. These
patterns also hold true at each quartile. This paper develops a quantitative,
dynamic general equilibrium model of life cycle behavior, which generates
consumption profiles consistent with the observed data. Borrowing constraints
are essential in explaining the accumulation of housing assets early in life,
while transaction costs are crucial in generating the slow downsizing of the
housing assets later in life.
·
Accounting
for the Heterogeneity in Retirement Wealth
Federal
Reserve Bank of
This paper studies a quantitative dynamic
general equilibrium life-cycle model where parents and their children are
linked by bequests, both voluntary and accidental, and by the transmission of
earnings ability. This model is able to match very well the empirical
observation that households with similar lifetime incomes hold very different
amounts of wealth at retirement. In the benchmark economy the correlation
between retirement wealth and lifetime earnings (0.41) is of the same magnitude
as in the data (0.48). The quantitative relevance of income heterogeneity,
borrowing constraints and intergenerational links in generating the
heterogeneity in retirement wealth is investigated. Income heterogeneity and
borrowing constraints are essential in generating the variation in retirement
wealth among low lifetime income households, while the existence of
intergenerational links is crucial in explaining the heterogeneity in
retirement wealth among high lifetime income households.
·
How Do Households
Portfolios Vary with Age?
This version: March 2006
This paper uses data from the Survey of Consumer
Finances to construct synthetic cohorts and to investigate the evolution of the
composition of households' housing and non-housing assets along the life cycle
in the
·
Policy Reforms, Housing, and Wealth
Inequality
This version: May 2006
I develop a quantitative, dynamic general equilibrium model of life cycle
behavior to study the effects of several policy reforms on assets composition
over the life cycle, wealth distribution and aggregate saving. Privatizing
social security increases aggregate saving, decreases overall wealth
inequality, and generates large welfare gain, especially for agents with high
initial productivity. Lowering down payment encourages income poor households
to hold more housing assets and generates a welfare gain for agents with low
initial productivity. Lowering transaction costs encourages households to hold
more housing assets and generates a welfare gain for agents with all initial
productivity.
·
Limited
Enforcement, Private Information, and Risk Sharing (with Hengjie Ai)
We consider an exchange economy with a
continuum of agents, each of whom is subject to idiosyncratic endowment shocks.
We study efficient allocations subject to two constraints: limited enforcement
of financial contracts, and private information about the predictable component
of the future endowment process. In our economy the immiseration
result, common in this literature, does not hold, and a nontrivial steady state
distribution exists. We calibrate our model to match the basic aggregate
moments of the
·
The Response of Consumption to Income Shocks: Some Empirical Findings
from CEX Data (with Hengjie Ai, Work in Progress)
This paper uses
microeconomic data from the Consumer Expenditure Survey to investigate the
response of household consumption to income shocks. We show that, conditional
on aggregate consumption, household consumption depends on the household's own
income, thus rejecting the assumption of full risk-sharing. The elasticity of
consumption to income is relatively small in the whole sample, consistent with
the existing literature. Households respond more to negative income shocks than
positive income shocks. We also find that the elasticity is hump-shaped:
Households in the middle income deciles have a much higher elasticity than
households at the bottom and at the top deciles. This pattern holds true when
we look at households in different age groups and different education groups.
·
Estate Taxes, Wealth Inequality, and
Intergenerational Links (with Marco Cagetti
and Mariacristina
De Nardi, Work in Progress)
This paper quantitatively studies the effects of several estate tax
reforms on inequality and aggregate income and capital accumulation in a realistically
calibrated life-cycle, general equilibrium model that displays a good fit of
the observed wealth concentration and the saving decisions of the richest
elderly. Preliminary results show that
abolishing estate taxation does increase aggregate saving and output, at the
cost of even higher wealth concentration in the hands of the richest few.
