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Are the French Cautious? Assets and Labour-Market Risk


Author Info

  • Luc Arrondel

    (CNRS-PSE and Banque de France, and School of Social Sciences, University of Southampton)

  • Hector Calvo Pardo

    (CNRS-PSE and Banque de France, and School of Social Sciences, University of Southampton)


Simulation methods that calibrate theoretical life-cycle models on actual income data to explain household saving put the share of precautionary assets in total assets at roughly 50%. Econometric studies, instead, suggest a range of 1-20%. Our study seeks to quantify the precautionary motive of French savers facing future income risks from the data of INSEEs 2004 Household Assets Survey. The measurements of these uncertainties are subjective, being directly projected by a household member for the five years ahead. They concern either the probability of losing ones job, or possible income fluctuations. Overall, the precautionary-saving motive seems fairly limited among the French. Its share depends on the type of assets envisaged, the population group involved, the assessment of future income risk, and the estimation method. Precautionary saving motivated by income risk seldom exceeds 10% of financial wealth or total wealth.

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Bibliographic Info

Article provided by Institut National de la Statistique et des Etudes Economiques in its journal Economie et Statistique.

Volume (Year): 417-418 (2009)
Issue (Month): (June)
Pages: 27-53.

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Handle: RePEc:crs:ecosta:es417-418b

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Related research

Keywords: Life Cycle Theory; Precautionary Saving; Income Risk; Job Loss;

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