We host different speakers at our Economic Theory & Policy Seminar. 

Upcoming topics and speakers will be posted below.

23. April 2024, 16:00 until 17:30

Theory & Policy Seminar / Piotr Denderski (Univ. Leicester) / Wealth, Quits and Layoffs

Other

Piotr Denderski will give a talk at our Economic Theory & Policy Seminar.

"Wealth, Quits and Layoffs"

Piotr Denderski, opens an external URL in a new window (University of Leicester)

Using worker-level panel data we document that current wealth predicts the probability that a worker transitions from employment to non-employment. Low-wealth workers face higher probability than the median worker, but so do the high-wealth workers. This U-shaped relationship is robust to a battery of controls and suggests that wealth feeds back into the income process, creating a novel interaction between wealth and income distributions. We extend the standard incomplete markets model a la Aiyagari-Bewley-Huggett to include search frictions and jobs with heterogeneous unemployment risk and show that it can replicate our findings because i) low wealth workers optimally accept higher risk jobs in order to leave unemployment faster, and ii) high wealth workers voluntarily quit to enjoy more leisure. Accounting for the non-trivial interactions between wealth and non-employment matters for the quantification of the precautionary savings motive, wealth distribution, and wealth mobility.</p>

Calendar entry

Event location

TU Wien, Sem.R. DB gelb 04
1040 Vienna
Wiedner Hauptstr. 8-10, Freihaus Building, Sem.R. DB gelb 04 (4th floor, yellow area)

 

Organiser

ECON
Julia Hutter
julia.hutter@tuwien.ac.at

 

Public

No

 

Entrance fee

No

 

Registration required

No

Theory & Policy Seminar / Piotr Denderski (Univ. Leicester) / Wealth, Quits and Layoffs

Piotr Denderski will give a talk at our Economic Theory & Policy Seminar.

"Wealth, Quits and Layoffs"

Piotr Denderski, opens an external URL in a new window (University of Leicester)

Using worker-level panel data we document that current wealth predicts the probability that a worker transitions from employment to non-employment. Low-wealth workers face higher probability than the median worker, but so do the high-wealth workers. This U-shaped relationship is robust to a battery of controls and suggests that wealth feeds back into the income process, creating a novel interaction between wealth and income distributions. We extend the standard incomplete markets model a la Aiyagari-Bewley-Huggett to include search frictions and jobs with heterogeneous unemployment risk and show that it can replicate our findings because i) low wealth workers optimally accept higher risk jobs in order to leave unemployment faster, and ii) high wealth workers voluntarily quit to enjoy more leisure. Accounting for the non-trivial interactions between wealth and non-employment matters for the quantification of the precautionary savings motive, wealth distribution, and wealth mobility.</p>