Dipartimento di Scienze economico-sociali e matematico-statistiche

Descrizione del progetto

This project will investigate the role of long-term unemployment risk, and its possible permanent consequences, in shaping households’ optimal investment in risky assets. A life-cycle model of optimal consumption, saving and wealth accumulation will be calibrate allowing for the possibility of long-term unemployment spells with permanent effects on the workers’ future earnings prospects. The age profile of optimal investment in risky assets is then derived through numerical simulation and compared with the results from standard life-cycle models without long-term unemployment risk.