Natasha Sarin’s interests in law teaching and scholarship are at the intersection of law and finance. Her current research focuses on financial regulation, with papers on both consumer finance and macroprudential risk management. Her work engages with contemporary policy debates and seeks to understand how best to regulate large financial institutions. Sarin is at the frontier of empirical law and economics, using novel datasets to address these important policy questions. Her work has received both academic and popular press attention, and has been covered by various media outlets, including the Washington Post, the Economist, and the Financial Times.
Prior to joining the faculty at Penn, Sarin earned a JD from Harvard Law School. She will receive a PhD in Economics from Harvard University in May 2019. She also received a BA in Ethics, Politics, and Economics from Yale University.
Recent influential work finds large increases in inequality in the U.S. based on measures of wealth concentration that notably exclude the value of social insurance programs. This paper revisits this conclusion by incorporating Social Security retirement benefits into measures of wealth inequality. We find that top wealth shares have not increased in the last three decades when Social Security is properly accounted for. When discounted at the risk-free rate, real Social Security wealth increased substantially from $4.8 trillion in 1989 to $40.9 trillion in 2016. When we adjust for systematic risk coming from the covariance of Social Security returns with the market portfolio, this increase remains sizable, growing from over $4.0 trillion in 1989 to $33.8 trillion in 2016. Consequently, by 2016, Social Security wealth represented 57% of the wealth of the bottom 90% of the wealth distribution. We conclude that progressive programs like Social Security represent the main source of savings for most Americans. Measures of inequality that exclude them are misleading.
Kerwin K. Charles is the Indra K. Nooyi Dean and Frederic D. Wolfe Professor of Economics, Policy, and Management at the Yale School of Management.
During his scholarly career, Dean Charles has studied and published on topics including earnings and wealth inequality, conspicuous consumption, race and gender labor market discrimination, the intergenerational transmission of economic status, worker and family adjustment to job loss and health shocks, non-work among prime-aged persons, and the labor market consequences of housing bubbles and sectoral change. He is a Research Associate at the National Bureau of Economic Research and an elected Fellow of the Society of Labor Economics. He serves on the Board of Trustees of the Panel Study of Income Dynamics, is a member of the Federal Economic Statistics Advisory Committee, and sits on the Editorial Board of the Journal of Labor Economics.
Charles was the Edwin A. and Betty L. Bergmann Distinguished Service Professor at the University of Chicago Harris School of Public Policy before being named Yale SOM dean in 2019. He received his doctorate from Cornell University and taught economics and public policy at the University of Michigan before moving to the University of Chicago in 2005. He has received multiple teaching awards and his many academic leadership roles have included running centers and programs within the Harris School and serving as the school’s deputy dean and later its interim dean.
Between 2001 and 2014, more than 6,500 American soldiers died while serving in Afghanistan and Iraq. Using data from the Defense Manpower Data Center on soldiers’ home states and exact dates of death, and date-specific labor supply information from the CPS-ORG, we find that labor supply among Muslim and Arab men from a state sharply declines in the two specific weeks following news of the death of a U.S. soldier from that state. Since news of a death of a U.S. soldier in the Middle East arguably causes a time- and state-specific shock to anti-Arab and anti-Muslim prejudice in the U.S., and because working less reduces interaction with others, we argue that our findings are consistent with the main but rarely directly tested prediction of Becker-style discrimination models that potential objects of prejudice-based discrimination will take costly actions to avoid interactions with those who harbor biased sentiments against them.
Alberto Rossi is the Provost’s Distinguished Associate Professor of Finance at the McDonough School of Business, Georgetown University. He is also the Associate Director of the Center for Financial Markets and Policy at Georgetown and an Academic Fellow of the Luohan Academy. His research interests include FinTech, Household Finance, Machine Learning and Asset Pricing. His recent work studies how robo-advisors can help individuals make better financial decisions and how to predict stock market returns using machine learning algorithms. He has worked extensively in analyzing big data, has collaborated with major brokerage houses, FinTech firms and asset managers around the world.
Professor Rossi’s work has been published in leading academic journals such as the Journal of Finance, the Review of Financial Studies, the Journal of Financial Economics and Management Science.
Before McDonough, he was an Associate Professor with tenure at the R.H. Smith School of Business, University of Maryland. He also worked as an economist at the Board of Governors of the Federal Reserve System in Washington DC. He received his PhD in Economics from the University of California, San Diego.
We study the effects of a large U.S. hybrid robo-adviser on the portfolios of previously self-directed investors. Across all investors, robo-advising reduces idiosyncratic risk by lowering the holdings of individual stocks and active mutual funds and raising exposure to low-cost indexed mutual funds. It further eliminates investors’ home bias and increases investors’ overall risk-adjusted performance, mainly by lowering investors’ portfolio risk. We use a machine learning algorithm, known as Boosted Regression Trees (BRT), to explain the cross-sectional variation in the effects of advice on portfolio allocations and performance. Finally, we study the determinants of investors’ sign-up and attrition.
Vitaly Bord is an Economist at the Federal Reserve Board. His research interests include banking, consumer finance, and corporate finance. He earned a PhD in Business Economics from Harvard University.
I document that large banks have higher fees and higher minimum required balances on deposit accounts relative to small banks. As a result, bank consolidation makes it relatively more expensive for low-income households to maintain bank accounts. Using a difference-in-differences methodology to estimate a causal impact, I show that, following acquisitions of small banks by large banks, deposit account fees and minimum required balances increase, and deposit outflow is almost 2 percentage points per year higher, relative to acquisitions by other small banks. The effect of consolidation on deposit outflow is stronger in areas with a higher proportion of low-income households. Areas in which large banks acquire small banks subsequently experience faster growth in non-bank financial services such as check-cashing facilities, consistent with some of the outflow corresponding to depositors who leave the banking system altogether. Moreover, households in areas affected by bank consolidation are more likely to accrue unpaid debts and to experience evictions after personal financial shocks, in line with these households facing difficulty in accumulating emergency savings without bank accounts.
Franco Peracchi is a Professor of Econometrics at the University of Rome Tor Vergata and a Professor of the Practice at Georgetown University. He is also a Fellow of the Einaudi Institute for Economics and Finance (EIEF) in Rome, Italy. He earned an MSc in Econometrics and Mathematical Economics from the LSE, and a PhD in Economics from Princeton University. His research interests include econometric theory, labor and health economics, and the economics of social security and pensions. His currently research areas include the long-term effects of growing up in wartime, cognitive decline among the elderly, distribution regression, and approaches to model uncertainty.
We investigate whether people correctly perceive their own cognitive decline, and the potential financial consequences of misperception. First, we document that older people tend to underestimate their own cognitive decline. Then, we show that individuals who experience a severe cognitive decline, but are unaware of it, are more likely to experience wealth losses. These losses largely reflect decreases in financial wealth and are mainly experienced by wealthier individuals, unaware of their declining memory, who were previously active on the stock market. Our findings support the view that financial losses among unaware respondents reflect bad financial decisions, not rational disinvestment strategies.
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