Earnings Uncertainty and Precautionary Saving

Luigi Guiso, Tullio Jappelli () and Daniele Terlizzese

No 699, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We test for the presence of precautionary saving using a self-reported measure of earnings uncertainty drawn from the 1989 Italian Survey of Household Income and Wealth. The effect of uncertainty on saving and wealth accumulations is consistent with the theory of precautionary saving and with decreasing prudence. Earnings uncertainty, however, explains only a small fraction of saving and asset accumulation. The results cast doubt on the empirical relevance of precautionary saving as a response to earnings uncertainty, but not on the importance of the precautionary motive per se. Besides earnings uncertainty, other major risks such as health and mortality risks may be important determinants of wealth accumulation.

Keywords: Earnings Uncertainty; Precautionary Saving (search for similar items in EconPapers)
JEL-codes: D81 E21 (search for similar items in EconPapers)
Date: 1992-06
References: Add references at CitEc
Citations: View citations in EconPapers (278)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=699 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Earnings uncertainty and precautionary saving (1992)
Working Paper: Earning Uncertainty and Precautionary Saving (1992)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:699

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=699

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().