Being Single Again? Asset and Portfolio Reshuffling (Due to Shock)

Eva M. Sierminska, CEPS/INSTEAD, Institute for the Study of Labor (IZA) and German Institute for Economic Research (DIW Berlin)
Maria Cristina Rossi, University of Turin

This paper examines the effect of widowhood on asset trajectories and portfolio composition. Currently, about half or more of households across countries are headed by women and therefore their ability to make financial decisions is crucial for their economic well-being as well as their dependents. In couple households, the portfolio structure is likely to reflect preferences of the main financial decision maker (usually the husband). If widowhood occurs it could be that singles re-optimize their decisions according to their own preferences. We test this by examining whether there is a change in the portfolio structure for households that have experienced the shock of becoming widowed and whether there are significant age/cohort effects.

  See extended abstract

Presented in Poster Session 6: Population Aging; Gender, Race and Ethnicity