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Saving behaviour and earnings uncertainty: Evidence from the British Household Panel Survey

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Author Info
Alessandra Guariglia () (Department of Economics, Keynes College, University of Kent at Canterbury, Canterbury, CT2 7NP, United Kingdom)

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Abstract

For the first time, this paper uses a panel data set, the British Household Panel Survey, to analyse saving behaviour in Britain. One objective is to test the precautionary saving hypothesis, according to which households save to self-insure against uncertainty. Our results show that in accordance with this hypothesis, various measures of uncertainty based on earnings variability have a statistically significant effect on households' saving decisions. Moreover, in accordance with the life cycle model, households save more if they expect their financial situation to deteriorate.

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Publisher Info
Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 14 (2001)
Issue (Month): 4 ()
Pages: 619-634
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Handle: RePEc:spr:jopoec:v:14:y:2001:i:4:p:619-634

Note: Received: 15 June 1999/Accepted: 4 January 2001
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Related research
Keywords: Precautionary saving; uncertainty; earnings variability;

Find related papers by JEL classification:
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

Cited by:
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  1. Guariglia Alessandra & Rossi Mariacristina, 2002. "Private Medical Insurance And Saving: Evidence From The British Household Panel Survey," Departmental Working Papers 165, Tor Vergata University, CEIS. [Downloadable!]
    Other versions:
  2. David Bywaters & D. Thomas, 2006. "Consumption, Wealth, and Indebtedness in the Context of Uncertainty: The Consumption Function Meets Portfolio Theory," International Advances in Economic Research, Springer, vol. 12(3), pages 298-307, August. [Downloadable!] (restricted)
  3. Sarah Brown & Karl Taylor & Robert McNabb, 2006. "Financial Expectations, Consumption and Saving: A Microeconomic Analysis," Working Papers 2006006, The University of Sheffield, Department of Economics, revised May 2006. [Downloadable!]
    Other versions:
  4. Sarah Brown & Karl Taylor, 2005. "Household Debt and Financial Assets: Evidence from Great Britain, Germany and the United States," Discussion Papers in Economics 05/5, Department of Economics, University of Leicester. [Downloadable!]
Statistics
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