Research

Job Market Paper

In 2023, more than half of renter households spent above 30% of their gross income on housing costs. This type of non-discretionary spending exacerbates consumption losses while unemployed. I use data from the Health and Retirement Study to show that workers use the option to move home as an insurance channel against labour market risk, and this channel is operative into middle age (up to age 40). To quantify this insurance mechanism, I estimate a structural lifecycle model of individuals who can insure against unemployment risk via saving or moving home. Agents exist in a directed search environment where they trade off future job market outcomes against job finding rates. I find that among workers who can move home, eliminating the option reduces average search duration by eight weeks. Further, the move home option is equivalent in welfare terms to a 71% increase in the unemployment benefit for an ex ante consumer in an economy without co-residence.
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This paper investigates the determinants of financial transfers from parents to adult children, with a focus on reconciling a key empirical puzzle: conditional on receipt, parental transfers are increasing in child income, a pattern inconsistent with typical models of intergenerational consumption smoothing. Using microdata from the Health and Retirement Study (1998–2018), I document robust patterns in the extensive and intensive margins of transfers with respect to child incomes. I show that while the likelihood of receiving a transfer declines with child income, the size of transfers rises with child income for most parent income groups. I develop a static model of parental altruism to highlight the tension between two mechanisms: altruistic parents reduce transfers as children become richer, but wealthier parents—whose children are also likely to have higher incomes give larger transfers. Allowing for heterogeneity in parental altruism allows the model to match both extensive margin and the average transfer, but cannot reproduce the positive relationship of the intensive margin with respect to child income.