Consumption smoothing among working-class American families before social insurance
AbstractThis paper examines the saving decisions of a large sample of turn-of-the-century working-class American families. We decompose each family's reported income into permanent and transitory components and then estimate marginal propensities to save from each component. Marginal propensities to save out of transitory income are large relative to the propensities based on permanent income, though the former lie much below one and the latter much above zero, remarkably similar to results based on contemporary data sets. Smoothing appears to have been primarily at medium rather than low frequencies, more consistent with precautionary than with life-cycle motives. Copyright 2007 , Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Economic Papers.
Volume (Year): 59 (2007)
Issue (Month): 4 (October)
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Other versions of this item:
- Michael G. Palumbo & John A. James & Mark Thomas, 1999. "Consumption smoothing among working-class American families before social insurance," Finance and Economics Discussion Series 1999-24, Board of Governors of the Federal Reserve System (U.S.).
- James, J.A. & Palumbo, M.G. & Thomas, M., 1998. "Consumption Smoothing Among Working-Class American Families Before Social Insurance," Papers 98-05, Houston - Department of Economics.
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- N31 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: Pre-1913
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