This paper uses micro data to estimate the determinants of household income and to measure how human capital and earnings uncertainty affect consumption. We also estimate how home-owners react to capital gains on housing and assess whether these gains are treated in the same way as other sources of income. Using UK micro data we show that estimates of permanent income and of earnings uncertainty have powerful effects on spending. We find that precautionary motives may account for a substantial proportion of household saving. We also provide estimates of the shape of the earnings profile for various occupational groups and of the returns to education in different professions. Copyright 1997 by Royal Economic Society.
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Volume (Year): 107 (1997) Issue (Month): 440 (January) Pages: 1-25 Download reference. The following formats are available: HTML
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Simon Burgess & Karen Gardiner & Stephen P. Jenkins & Carol Propper, 2000.
"Measuring Income Risk,"
Discussion Papers of DIW Berlin
213, DIW Berlin, German Institute for Economic Research.
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Burgess, Simon & Gardiner, Karin & Jenkins, Stephen P & Propper, Carol, 2000.
"Measuring Income Risk,"
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