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Household Saving, Class Identitiy, and Conspicuous Consumption

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Author Info

  • Jon D. Wisman

Abstract

The saving rate for U.S. households has long been low relative to those in other wealthy countries and in recent decades this rate has plummeted. Most studies of household saving behavior are based on the life-cycle theory of saving. However, there is doubt as to whether these studies adequately explain the low and declining rate in the U.S. This study explores two hypotheses that depart from the life-cycle explanatory framework. The first hypothesis examines the possibility that the low rate of household saving in the U.S. is related to Americans’ strong belief that vertical mobility in the U.S. is readily possible and hence their relatively weak sense of class identity. A second corollary hypothesis is that in an economy in which a high degree of vertical mobility is thought possible, a high degree of inequality in the distribution of income and wealth may reinforce the tendency to save little.

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File URL: http://w.american.edu/cas/economics/repec/amu/workingpapers/2008-19.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by American University, Department of Economics in its series Working Papers with number 2008-19.

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Length: 38 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:amu:wpaper:1908

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Web page: http://www.american.edu/cas/economics/

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Inequality, Veblen and the crisis
    by chris dillow in Stumbling and Mumbling on 2008-11-13 12:26:49
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Cited by:
  1. Jon D. Wisman, 2013. "Wage stagnation, rising inequality and the financial crisis of 2008," Cambridge Journal of Economics, Oxford University Press, vol. 37(4), pages 921-945.
  2. Jon D. Wisman & Matthew Davis, 2011. "Degraded Work, Declining Community, Rising Inequality, and the Transformation of the Protestant Ethic in America: 1870-1930," Working Papers 2011-08, American University, Department of Economics.
  3. David Cayla, 2013. "European Debt Crisis: How a Public Debt Restructuring Can Solve a Private Debt Issue," Journal of Economic Issues, M.E. Sharpe, Inc., vol. 47(2), pages 427-436, June.
  4. Jon D. Wisman & Barton Baker, 2011. "Rising Inequality and the Financial Crises of 1929 and 2008," Working Papers 2011-01 JEL classificatio, American University, Department of Economics.
  5. Jon D. Wisman & Barton Baker, 2009. "Increasing Inequality, Status Insecurity, Ideology, and the Financial Crisis of 2008," Working Papers 2009-14 JEL classificatio, American University, Department of Economics.
  6. Adkisson, Richard V. & Saucedo, Eduardo, 2012. "Emulation and state-by-state variations in bankruptcy rates," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(4), pages 400-407.
  7. Mark Setterfield & Yun Kim, 2013. "Debt Servicing, Aggregate Consumption, and Growth," Working Papers 1316, Trinity College, Department of Economics.
  8. Jon D. Wisman, 2013. "The Growth Trap, Ecological Devastation, and the Promise of Guaranteed Employment," Challenge, M.E. Sharpe, Inc., vol. 56(2), pages 53-78, March.
  9. Jon D. Wisman, 2013. "Labor Busted, Rising Inequality and the Financial Crisis of 1929: An Unlearned Lesson," Working Papers 2013-07, American University, Department of Economics.
  10. Jon D. Wisman & Kevin Capehart, 2009. "Creative Destruction, Economic Insecurity, Stress and Epidemic Obesity," Working Papers 2009-13 JEL classificatio, American University, Department of Economics.

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