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Source: Journal of Finance
Resulting in 2 citations.
1. Angerer, Xiaohong W.
Lam, Pok-Sang
Income Risk and Portfolio Choice: An Empirical Study
Journal of Finance 64,2 (April 2009): 1037-1055
Cohort(s): NLSY79
Publisher: Wiley Online
Keyword(s): Earnings; Financial Investments; Income Dynamics/Shocks; Income Risk; Life Cycle Research

Permission to reprint the abstract has not been received from the publisher.

This paper investigates the relationship between portfolio choice and labor income risk in the National Longitudinal Survey of Youth 1979 Cohort. Permanent income risk (variability of shocks to income that have permanent effect) significantly reduces the share of risky assets in the household's portfolio, while transitory income risk (variability of shocks with no lasting effect) does not. This result provides strong evidence that households' portfolio choices respond to labor income risks in a manner consistent with economic theory.
Bibliography Citation
Angerer, Xiaohong W. and Pok-Sang Lam. "Income Risk and Portfolio Choice: An Empirical Study." Journal of Finance 64,2 (April 2009): 1037-1055.
2. Kuhnen, Camelia M.
Melzer, Brian
Noncognitive Abilities and Financial Delinquency: The Role of Self‐Efficacy in Avoiding Financial Distress
Journal of Finance published online (23 September 2018): DOI: 10.1111/jofi.12724.
Also: https://onlinelibrary.wiley.com/doi/10.1111/jofi.12724
Cohort(s): NLSY79, NLSY79 Young Adult
Publisher: Wiley Online
Keyword(s): Credit/Credit Constraint; Debt/Borrowing; Financial Behaviors/Decisions; Noncognitive Skills; Pearlin Mastery Scale

Permission to reprint the abstract has not been received from the publisher.

We investigate a novel determinant of financial distress, namely, individuals' self‐efficacy, or belief that their actions can influence the future. Individuals with high self‐efficacy are more likely to take precautions that mitigate adverse financial shocks. They are subsequently less likely to default on their debt and bill payments, especially after experiencing negative shocks such as job loss or illness. Thus, noncognitive abilities are an important determinant of financial fragility and subjective expectations are an important factor in household financial decisions.

This article is protected by copyright. All rights reserved

Bibliography Citation
Kuhnen, Camelia M. and Brian Melzer. "Noncognitive Abilities and Financial Delinquency: The Role of Self‐Efficacy in Avoiding Financial Distress." Journal of Finance published online (23 September 2018): DOI: 10.1111/jofi.12724.