Jia Luo

 

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Jia LUO
3770 Keystone Ave. Apt 309, Los Angeles, CA, 90034
(310)-926-5188
jialuo@ucla.edu
Homepage: http://jialuo.bol.ucla.edu

Ph.D., Economics, University of California, Los Angeles (expected)                                June 2007
C.Phil., Economics, University of California, Los Angeles                                       September 2004
M.A. Economics, University of California, Los Angeles                                               March 2005
M.A., Economics, CCER, Beijing University, China                                                         July 2002
B.A., Finance, Renmin University of China                                                                     July 2000

Research: Macroeconomics, Financial Economics, and Public Finance
Teaching: Microeconomics, Macroeconomics, and Econometrics

Title: Uncertain Medical Expenses and Portfolio Choice Over the Life Cycle
In this paper, I explore the effects of uninsurable risk of health expenditures as well as labor income risk on portfolio choice in a realistically calibrated life-cycle model. Most of the existing literature that examines labor income risk and its effect on portfolio composition over the life cycle can provide compelling explanations for the vast differences in portfolios between young and old investors; but few of these studies can explain continued declines in risk-taking with age after retirement. This paper uses MEPS (Medical Expenditure Panel Survey) and HRS (Health and Retirement Study) data to calibrate uncertain medical expenses for the retired. With the consideration of idiosyncratic health expense risk in addition to labor income risk, the model can generate declining financial risk-taking with age after retirement, and therefore fits the data much better than those studies which consider labor income alone.  Additionally, regressions on simulated data also show that investors with poorer health tend to hold a smaller share of stocks in their portfolios, which is consistent with the empirical pattern of portfolio choice. Finally, using the model I have developed, I predict the impact of changes in government health insurance programs, such as the expansion of the Medicare program, on individuals’ portfolio choices. Simulated results show that a more generous Medicare policy significantly increases the proportion of financial wealth held in equities for the retired.

Title: Optimal Unemployment Insurance with Consumption Commitments: Can Current Policy Be Justified?
In this paper, I propose the optimal design of the unemployment insurance contract in the environment with consumption commitments in which people cannot freely substitute among different goods within a single period. The optimal plan I obtain involves a relatively flat decreasing sequence of insurance payments over some duration, which is then followed by a large drop to a very low level of transfer. The results fit current policy well, therefore give an explanation to justify current policy. Additionally, the model predicts that if we change from the current unemployment insurance program to the optimal contract, the government will only save 1.7% in unemployment payments, which shows that current policy is not as flawed as researchers have traditionally believed. In fact, to achieve efficiency, unemployment transfers should include a jump, similar to what we observe in practice.

Citizenship: P.R.China
Languages: English, Mandarin
Computer Skills: Matlab, Mathematica, Stata, SAS

 

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