Does job security matter for consumption? An analysis on Italian microdata
AbstractThis paper investigates if labour income uncertainty, particularly as related to the development and diffusion of fixed and short-term work contracts, may have played a role in determining the recent decline of the marginal propensity to consume of Italian households. We analyse this issue in the framework of a standard precautionary saving model, proxing labour income uncertainty with subjective job security measures. Due to the lack of a unique dataset containing all the relevant information, we adopt a two-step two-sample procedure. Estimation results, based on cross-section data for the year 2000, point to a potentially substantial effect of job security perception on household’s nondurables consumption. Its actual capability to prompt aggregate consumption adjustments is however likely to be very limited.
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Bibliographic InfoPaper provided by ISTAT - Italian National Institute of Statistics - (Rome, ITALY) in its series ISAE Working Papers with number 54.
Length: 32 pages
Date of creation: Aug 2005
Date of revision:
Consumption; precautionary saving; job security; two-step twosample estimation. JEL Classification: D12; E21; C42.;
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- JEL - Labor and Demographic Economics - - - - -
- Cla - Mathematical and Quantitative Methods - - - - -
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
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