Speaker: Mariacristina De Nardi
Affiliation: University of Minnesota
Date and time: Wednesday, March 19, 202511:30 (Santiago, GMT-03:00)
Location: Sala Constitucion at the Central Bank of Chile, Morandé 115, second floor.
Registration: seminarios@bcentral.cl

Abstract: This paper develops a dynamic life-cycle model to examine how savings and labor supply decisions are shaped by health, marital, and wage risks, as well as by bequest motives. The model incorporates endogenous human capital accumulation and retirement, child-rearing costs, and the risks associated with marital transitions, health, and medical expenses -including at the end of life. It also allows for bequest motives which can capture the observed division of transfers to the surviving spouse and other heirs upon the death of the first spouse, as well as the transfers to all heirs upon the death of the last household member. We estimate it using PSID and HRS data for the 1941-1945 cohort and the Method of Simulated Moments. Our findings reveal the critical role of these risks and bequest motives in shaping savings, labor decisions, and the interplay between risks and bequests over the life cycle.