30Note that σ𝜃 = 0.1  is smaller than the estimate for college graduates estimated in Carroll and Samwick (1997) (        √ -----
= 0.197 =  0.039  ) which is used by Cagetti (2003). The reason for this choice is that Carroll and Samwick (1997) themselves argue that their estimate of σ𝜃  is almost certainly increased by measurement error.