Direkt zum Inhalt

Vortrag
The Effect of Health and Employment Risks on Precautionary Savings

Johannes Geyer


27th Annual Congress of the European Economic Association : EEA 2012
Malaga, Spanien, 27.08.2012 - 31.08.2012


get_app Beitrag | PDF  0.65 MB

Abstract:
This paper extends the idea of using ex-ante risk measures in a model of precautionary savings by explicitly simulating future net-income risks. The uncertainty measure takes into account the interdependency of labour market status and health. The model is estimated for prime age males using the German Socio-Economic Panel Study for years 2001-2007. The empirical analysis is conducted using a measure for saving stocks and saving flows. The latter model allows to control for individual specific effects. I find evidence for precautionary savings in response to the uncertainty measures. The results are robust and stable across specifications. There is evidence for a share of precautionary wealth of about 14 to 17 percent.

Abstract

This paper extends the idea of using ex-ante risk measures in a model of precautionary savings by explicitly simulating future net-income risks. The uncertainty measure takes into account the interdependency of labour market status and health. The model is estimated for prime age males using the German Socio-Economic Panel Study for years 2001-2007. The empirical analysis is conducted using a measure for saving stocks and saving flows. The latter model allows to control for individual specific effects. I find evidence for precautionary savings in response to the uncertainty measures. The results are robust and stable across specifications. There is evidence for a share of precautionary wealth of about 14 to 17 percent.

Johannes Geyer

Stellvertretender Abteilungsleiter in der Abteilung Staat



JEL-Classification: D91;E21
Keywords: Precautionary savings, health, employment, risks
DIW-Link
Array

keyboard_arrow_up