Table 5. Sensitivity analysis: changes in portfolio management method with no delegation option.

This table shows the life cycle patterns of key variables for alternative model specifications. Column 1 uses baseline parameters as in Table 1. Column 2 shows results when human capital is deterministic over the life cycle, with no learning by doing. Column 3 shows results when the investor must pay a fixed initial stock market participation cost in addition to a recurring time cost. Column 4 provides results when the time cost of active management is set at a fixed 4% for all ages. Column 5 shows results when the endogenous human capital process is matched with the wage trends of college graduates in the PSID.

	Ages	(1) Baseline	(2) No learning by doing	(3) Initial participation cost	(4) Flat time cost	(5) College graduates
Inertia fraction	20–35	0.755	0.860	0.770	0.742	0.729
	36–50	0.552	0.682	0.556	0.547	0.502
	51–65	0.540	0.632	0.536	0.534	0.499
	66–80	0.496	0.605	0.498	0.439	0.460
	80+	0.703	0.765	0.701	0.573	0.694
Wealth	20–35	0.432	0.240	0.422	0.435	0.455
	36–50	0.982	0.675	0.970	0.986	1.039
	51–65	1.262	1.006	1.261	1.274	1.317
	66–80	1.163	0.963	1.151	1.190	1.201
	80+	0.685	0.572	0.680	0.825	0.697
Consumption	20–35	0.224	0.131	0.225	0.223	0.231
	36–50	0.267	0.188	0.265	0.266	0.279
	51–65	0.290	0.235	0.289	0.291	0.305
	66–80	0.216	0.196	0.215	0.214	0.224
	80+	0.229	0.209	0.228	0.233	0.234
Labor supply	20–35	0.441	0.242	0.443	0.439	0.457
	36–50	0.372	0.263	0.370	0.372	0.393
	51–65	0.323	0.254	0.323	0.325	0.347
Equity shares	20–35	0.467	0.219	0.435	0.486	0.472
	36–50	0.696	0.413	0.691	0.713	0.721
	51–65	0.632	0.431	0.627	0.646	0.683
	66–80	0.510	0.365	0.495	0.532	0.565
	80+	0.458	0.357	0.444	0.439	0.492
Earnings	20–35	0.261	0.151	0.262	0.260	0.271
	36–50	0.267	0.199	0.266	0.267	0.279
	51–65	0.267	0.224	0.267	0.268	0.278
	66–80	0.174	0.166	0.174	0.174	0.176
	80+	0.175	0.167	0.175	0.175	0.178
Human capital	20–35	1.080	1.066	1.080	1.079	1.091
	36–50	1.209	1.154	1.209	1.208	1.229
	51–65	1.271	1.218	1.270	1.270	1.294