UCL Department of Economics


Kieran Larkin

Kieran Larkin


Kieran Larkin - Website

Research interests:

Primary: Consumption, Housing
Secondary: Labor economics

Paper title - 'Job Risk, Separation Shocks and Household Asset Allocation'
Abstract - The distribution of assets is of first order importance to the aggregate response of the economy to shocks. Households exposure to risk in the labor market is a key determinant of their asset allocation decision, but a household’s asset position may also impact the jobs they choose and risk faced. This paper studies the joint determination of households’ asset decisions and labor market outcomes. We build a model that incorporates a jobs ladder, heterogeneity in job risk and saving in liquid and illiquid assets. The model replicates the positive correlation between job risk, the liquidity of household portfolios in the micro data and captures the housing choices following a job separation. The joint determination of asset and labor market outcomes is important for the response of the economy to labor market shocks in the Great Recession. The fact the Great Recession occurred following a decline in the job separation rate increased the negative response of consumption by 40 percent. Heterogeneity in job risk is important for amplification.


  • Morten Ravn (UCL)
  • Orazio Attanasio (UCL)
  • Vincent Sterk (UCL)