Stock market participation among working household heads jumped upwards in the year 2020, in Germany by about 25%. A major cause is the required use of work from home (WfH). We show this by repeating a benchmark study with demanding data requests and adding WfH to the explanatory variables. Moreover, we implement an instrumental variables estimation based on WfH capacity. The transmission channels seem to work via increased available time and time flexibility. Moreover, we show that WfH makes the stock market accessible to a broader population, including lower income groups, which may contribute to lower income inequality.

In most countries, retirement wealth is relatively illiquid due to early withdrawal penalties. While policymakers face a trade-off between flexibility and commitment, there is no consensus on the optimal solution to this problem. Exploiting administrative tax data and a natural experiment from Denmark, we document how individuals react to an exogenous reduction in the early withdrawal penalty. Moreover, we show how individuals use early withdrawal from pension accounts to smooth out the financial consequences of negative life events like unemployment. While the empirical results confirm the benefits of flexibility in case of a negative life event, they also suggest that households may be tempted to spend instead of saving for retirement if the penalty is too low. We use a life-cycle model to give a structural interpretation to the data and evaluate alternative policies to optimally balance the trade-off between flexibility and commitment.

Low- or middle-income countries, where participation in pension schemes is rare, are experiencing fast population aging and weakening traditional risk-sharing networks, but little is known about how their citizens prepare financially for old age. Using age-cohort-time decompositions on 18 years of micro-data from Pakistan, we find that the average household accumulates 4.2 years’ worth of consumption between the head’s ages of 25 and 65, mostly in the form of illiquid residential housing. Land is also an important part of rural households’ portfolio but grows little over the life cycle (10 months’ worth). More liquid forms of wealth such as financial wealth also grow with age, but in much more modest amounts. This ability to long-term save could motivate the extension of contributory pension instruments to the informal sector. More recent cohorts accumulate significantly more which is consistent with anticipations of higher longevity and lower family transfers in old age.

Financial literacy research shows that women and older people have significantly lower levels of financial literacy, which affects investment and savings decisions. Confidence can be a driving force in responding to financial literacy questions and in financial decision-making. We conduct a survey experiment to test whether information about group differences in numeracy skills affects confidence, hypothetical investment and savings decisions, and demand for information and education. We find that providing information about group differences has some positive effects on male respondents' confidence, but doesn't affect female respondents. Furthermore, providing information about group differences doesn't affect investment and savings decisions or the demand for political information.