Nick Turner is a senior economist at the Federal Reserve Board of Governors. Previously, Nick worked for seven years in the Office of Tax Analysis at the U.S. Treasury Department. In his research, Nick considers how people respond to government programs and policies, such as how taxpayers learn about benefits administered through the tax code, how tax refunds affect college enrollment and how colleges and universities respond to tax benefits for higher education. Nick’s research also focuses on social mobility, examining the extent to which low-income children grow up to be low-income adults, the role the colleges and universities play in social mobility and analyzing disparities in life expectancy by income. When not thinking about economics, Nick enjoys running, spending time with his wife Lisa and chasing after their two sons, Evan and Jason.
What is the labor earnings risk that households face over the business cycle? We answer this question using detailed population level administrative data on earnings from the U.S. Internal Revenue Service from 1999-2014. By analyzing total household earnings as well as each member’s earnings, we offer several new findings. One, house-holds face substantially less risk compared to risk inferred from only males alone. We find that households have about one-third less skewness risk and roughly half as much dispersion risk. Consistent with work analyzing male labor earnings only, we find that household skewness increases during recessions because larger earning losses are more likely and large earnings gains are less likely compared to expansions. Second, while male earnings dispersion increases during recessions, we find that there is no increase in the dispersion of household earnings during recessions compared to expansions. Third, female labor supply changes ameliorate the household’s earnings risk. Extensive margin responses help to reduce dispersion and skewness of household earnings over the business cycle.
Joseph Briggs is an economist in the at the Federal Reserve Board of Governors. His research focuses on household financial decisions, lifecycle investing and portfolio choice, retirement saving, insurance holdings, and the long-term care insurance market. Prior to joining the Federal Reserve Board, Joseph finished a PhD in economics at New York University in 2016 and a bachelor’s degree in mathematics from North Carolina State University in 2010.
We estimate the causal effect of wealth on financial risk taking using a large sample of Swedish lottery players that were randomly assigned $500M. A $150,000 windfall gain increases stock ownership probability by 12 percentage points among pre-lottery nonparticipants and causes a significant decrease in the share of risky assets held by pre-lottery equity owners. These effects are immediate, heterogeneous, and persistent at long horizons. Furthermore, patterns in the data suggest limited roles for real estate, debt, loss aversion, and procrastination in explaining these patterns. Instead, households eschew equities for bonds, especially following periods of negative equity returns. Using a plausibly calibrated structural model, we find that accounting for the low entry of nonparticipants requires entry costs far higher than can plausibly be interpreted as financial costs, but that the negative effect on risky asset share is easily explained by the presence of future income.
Taylor Begley is an Assistant Professor of Finance at the Olin Business School at Washington University in St. Louis. His research interests include financial intermediation, financial regulation, financial contracting, information economics, and corporate finance. Prior to moving to Washington University, Taylor earned a bachelor’s and master’s degree in Electrical Engineering at the University of Kentucky, and a PhD in Finance at the University of Michigan, Ross School of Business before working as an Assistant Professor at London Business School.
The incidence of mis-selling, fraud, and poor customer service by retail banks is significantly higher in markets with lower income and educational attainment. Further, areas with a higher share of minority population experience significantly worse outcomes even after controlling for factors such as income, education, and house price changes. Regulations aimed at improving access to credit to such areas are partly responsible for these findings. Specifically, low-to-moderate-income (LMI) areas targeted by the
Community Reinvestment Act have significantly worse outcomes and this effect is magnified further for LMI areas with high-minority population. The results highlight an unintended adverse consequence of such quantity-focused regulations on the quality of credit to poor and minority customers.
Sumit Agarwal is William G. Droms Term Professor of Finance at the McDonough School of Business and a Professor of Economics (courtesy appointment) at Georgetown University. Previously, he was the Vice-Dean of Research and the Low Tuck Kwong Professor at the School of Business and a Professor in the departments of Economics, Finance and Real Estate at the National University of Singapore. He is also a Research Associate at Research Associate, Institute of Real Estate Studies, Center for Quantitative Finance, Center for Behavioural Economics, and Risk Management Institute. Before that he was a senior financial economist in the research department at the Federal Reserve Bank of Chicago and prior to joining the Chicago Fed, he was a senior vice president and credit risk management executive in the Small Business Risk Solutions Group of Bank of America.Sumit’s research interests include issues relating to financial institutions, household finance, behavioral finance, international finance, real estate markets and capital markets. He has published over fifty research articles in journals like the American Economic Review, Quarterly Journal of Economics, Journal of Political Economy, Journal of Financial Economics, Review of Financial Studies, Review of Economics and Statistics , Management Science, Journal of Financial Intermediation, Journal of Money, Credit, and Banking among others. Additionally, he has co-edited a collected volume on Household Credit Usage: Personal Debt and Mortgages. He writes regular op-ed’s in the Straits Times and is featured on various media outlets like the BBC, CNBC, and Fox on issues relating to finance, banking, and real estate markets. Sumit’s research is widely cited in leading newspapers and magazines like the Wall Street Journal, The New York Times, The Economist, and the U.S Presidents Report to Congress. He also runs a blog on household financial decision making called Smart Finance.
Claudia Sahm is currently the chief of the Consumer & Community Development Research section at the Federal Reserve Board. Her research is on the household response to fiscal stimulus, expectations, and economic measurement. She previously worked on the Board staff’s macroeconomic forecast, starting in 2007. Sahm was a senior economist at the Council of Economic Advisers in 2015-2016. She has a Ph.D. in economics from the University of Michigan and a B.A. from Denison University.
Leonard Burman is an Institute Fellow at the Urban Institute, the Paul Volcker Professor of Public Administration and International Affairs at the Maxwell School of Syracuse University, and senior research associate at Syracuse University’s Center for Policy Research. He co-founded the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, in 2002. He was Deputy Assistant Secretary for Tax Analysis at the Treasury from 1998 to 2000 and Senior Analyst at the Congressional Budget Office from 1988 to 1997. He is past-president of the National Tax Association (NTA) and 2016 recipient of the NTA’s Davie-Davis Award for Public Service. Burman is the coauthor with Joel Slemrod of Taxes in America: What Everyone Needs to Know and author of The Labyrinth of Capital Gains Tax Policy: A Guide for the Perplexed, and co-editor of several books. He is often invited to testify before Congress and has written for scholarly journals as well as media outlets such as the Washington Post, New York Times, and the Wall Street Journal. He holds a Ph.D. from the University of Minnesota and a B.A. from Wesleyan University.
Gordon Gray is director of fiscal policy at the American Action Forum, with areas of expertise in the economy and the budget. Most recently, he served as senior policy adviser to Sen. Rob Portman, R-Ohio, and also served as policy director during Portman’s campaign. Before joining the campaign, he was a professional staff member for the Senate Budget Committee, and before that was deputy director of domestic and economic policy for Republican Sen. John McCain’s presidential campaign. He also worked for several years at the American Enterprise Institute.
Alan D. Viard is a resident scholar at the American Enterprise Institute (AEI), where he studies federal tax and budget policy. Prior to joining AEI, Viard was a senior economist at the Federal Reserve Bank of Dallas and an assistant professor of economics at Ohio State University. He has also been a visiting scholar at the US Department of the Treasury’s Office of Tax Analysis, a senior economist at the White House’s Council of Economic Advisers, and a staff economist at the Joint Committee on Taxation of the US Congress. While at AEI, Viard has taught public finance at Georgetown University’s Public Policy Institute. He also cohosted the New York University Law School tax policy colloquium in the spring 2015 semester. Earlier in his career, Viard spent time in Japan as a visiting scholar at Osaka University’s Institute of Social and Economic Research. A prolific writer, Viard is a frequent contributor to AEI’s “On the Margin” column in Tax Notes and was nominated for Tax Notes’s 2009 Tax Person of the Year. He has also testified before Congress, and his work has been featured in a wide range of publications, including Room for Debate in The New York Times, TheAtlantic.com, Bloomberg, NPR’s Planet Money, and The Hill. Viard is the coauthor of “Progressive Consumption Taxation: The X Tax Revisited” (2012) and “The Real Tax Burden: Beyond Dollars and Cents” (2011), and the editor of “Tax Policy Lessons from the 2000s” (2009). Viard received his Ph.D. in economics from Harvard University and a B.A. in economics from Yale University. He also completed the first year of the J.D. program at the University of Chicago Law School, where he qualified for law review and was awarded the Joseph Henry Beale prize for legal research and writing.
Michael, an economist, studies and teaches economics of the family. His publications include Allocation of Income within the Household (with Edward P. Lazear, Univ of Chicago Press, 1988), Sex in America (with coauthors, Little Brown & Co., 1994), Measuring Poverty: A New Approach (co-edited with Constance F. Citro, National Academy Press, 1995), and The Five Life Decisions (Univ of Chicago Press, 2016).
Michael taught economics at UCLA and Stanford University before joining the faculty at the University of Chicago in 1980. He served as CEO of NORC for several years and was the Project Director of the National Longitudinal Survey of Youth (NLSY) Program. He also helped design and oversee the 1991 survey of the Children of the National Child Development Study (NCDS) in Great Britain. He was the founding dean of Chicago’s Harris School of Public Policy Studies, and continues to teach at the Harris School.
He served on the Federal Advisory Committee to the National Children’s Study 2002–2006. In 2005, Michael received the Robert J. Lapham Award from the Population Association of America; he is a Fellow of the American Association for the Advancement of Science, a National Associate of the National Academy of Sciences, and a Corresponding Fellow of the British Academy.
Choices matter. And in your teens and twenties, some of the biggest life decisions come about when you feel the least prepared to tackle them.
Economist Robert T. Michael won’t tell you what to choose. Instead, he’ll show you how to make smarter choices. Michael focuses on five critical decisions we all face about college, career, partners, health, and parenting. He uses these to demonstrate how the science of scarcity and choice—concepts used to guide major business decisions and shape national legislation—can offer a solid foundation for our own lives. Employing comparative advantage can have a big payoff when picking a job. Knowing how to work the marketplace can minimize uncertainty when choosing a partner. And understanding externalities—the ripple of results from our actions—can clarify the if and when of having children.
Michael also brings in data from the National Longitudinal Survey of Youth, a scientific sample of 18 million millennials in the United States that tracks more than a decade of young adult choices and consequences. As the survey’s longtime principal investigator and project director, Michael shows that the aggregate decisions can help us understand what might lie ahead along many possible paths—offering readers insights about how their own choices may turn out.
There’s no singular formula for always making the right choice. But the adaptable framework and rich data at the heart of The Five Life Decisions will help you feel confident in whatever you decide.
George Washington University School of Business
Duquès Hall, Room 652
George Washington University School of Business
Duquès Hall, Room 652
George Washington University School of Business
Duquès Hall, Room 652
George Washington University School of Business
Duquès Hall, Room 652
George Washington University School of Business
Duquès Hall, Room 652
George Washington University School of Business
Duquès Hall, Room 652