Suppose you find evidence that high school dropout workers are more likely to retire at age 62 than are college-educated workers. You conclude that these workers do so because they are more liquidity-constrained than are other workers. Can you think of alternative explanations for this finding?
Answer to relevant QuestionsConsider an economy that is composed of identical individuals who live for two periods. These individuals have preferences over consumption in periods 1 and 2 given by U = ln(C1) + ln(C2). They receive an income of 100 in ...The Organisation for Economic Co-operation and Development (OECD) compares net replacement rates for unemployed families of different types across countries. These data are available online through the “Statistics” link ...Are individuals more likely to maintain their pre-injury consumption levels after an easily preventable on-the-job injury than after a difficult-to-prevent on-the-job injury? Explain. What negative externalities arise when an individual does not have health insurance? Suppose the government of Orwellia decides to genetically test all individuals for the risk of major illness, and reports the results of these tests to potential insurers when people apply for individual health insurance ...
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