IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/92717.html
   My bibliography  Save this paper

Decent work and the effect of job instability on consumption of Colombian households

Author

Listed:
  • Ruiz, Freddy
  • Lugilde, Alba

Abstract

The aim of this paper is to study empirically the role of decent work on household consumption in Colombia. Using data from the Large Integrated Household Survey (GEIH) and the Colombian Longitudinal Survey (ELCA) we calculate for Colombia several of the decent work indicators proposed by the International Labour Organization and go one step further constructing their homologous at microeconomic level as measures of the job instability borne by the workers. The constructed indicators measure the poor quality of employment the individuals have which implies uncertainty about future labour income. This work addresses the effect this labour uncertainty has on household consumption. Our results show that being in a situation of vulnerability or labour instability, which generates uncertainty about future income, alters household consumption patterns. This is consistent with the evidence of the existence of precautionary saving in Colombian households.

Suggested Citation

  • Ruiz, Freddy & Lugilde, Alba, 2019. "Decent work and the effect of job instability on consumption of Colombian households," MPRA Paper 92717, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:92717
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/92717/1/MPRA_paper_92717.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alessandra Guariglia & Byung‐Yeon Kim, 2003. "The Effects of Consumption Variability on Saving: Evidence from a Panel of Muscovite Households," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(3), pages 357-377, July.
    2. Keith A. Bender & Ioannis Theodossiou, 2018. "The Unintended Consequences of Flexicurity: The Health Consequences of Flexible Employment," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(4), pages 777-799, December.
    3. Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo & Ana María Tribín-Uribe, 2018. "Determinants of Formal and Informal Saving in Colombia," Investigación Conjunta-Joint Research, in: María José Roa García & Diana Mejía (ed.), Financial Decisions of Households and Financial Inclusion: Evidence for Latin America and the Caribbean, edition 1, volume 1, chapter 4, pages 95-123, Centro de Estudios Monetarios Latinoamericanos, CEMLA.
    4. A. Sandmo, 1970. "The Effect of Uncertainty on Saving Decisions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 37(3), pages 353-360.
    5. Ignacy SACHS, 2004. "Inclusive development and decent work for all," International Labour Review, International Labour Organization, vol. 143(1-2), pages 161-184, March.
    6. Malley, James R & Moutos, Thomas, 1996. "Unemployment and Consumption," Oxford Economic Papers, Oxford University Press, vol. 48(4), pages 584-600, October.
    7. Mario Menegatti, 2010. "Uncertainty And Consumption: New Evidence In Oecd Countries," Bulletin of Economic Research, Wiley Blackwell, vol. 62(3), pages 227-242, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alba Lugilde & Roberto Bande & Dolores Riveiro, 2018. "Precautionary saving in Spain during the great recession: evidence from a panel of uncertainty indicators," Review of Economics of the Household, Springer, vol. 16(4), pages 1151-1179, December.
    2. Lugilde, Alba & Bande, Roberto & Riveiro, Dolores, 2017. "Precautionary Saving: a review of the theory and the evidence," MPRA Paper 77511, University Library of Munich, Germany.
    3. Roberto Bande & Dolores Riveiro, 2013. "Private Saving Rates and Macroeconomic Uncertainty: Evidence from Spanish Regional Data," The Economic and Social Review, Economic and Social Studies, vol. 44(3), pages 323-349.
    4. Baiardi, Donatella & Manera, Matteo & Menegatti, Mario, 2013. "Consumption and precautionary saving: An empirical analysis under both financial and environmental risks," Economic Modelling, Elsevier, vol. 30(C), pages 157-166.
    5. Bande, Roberto & Riveiro, Dolores, 2012. "The Consumption-Investment-Unemployment Relationship in Spain: an Analysis with Regional Data," MPRA Paper 42681, University Library of Munich, Germany.
    6. Garz, Marcel, 2014. "Consumption, labor income uncertainty, and economic news coverage," MPRA Paper 56076, University Library of Munich, Germany.
    7. Mario Menegatti, 2010. "Uncertainty And Consumption: New Evidence In Oecd Countries," Bulletin of Economic Research, Wiley Blackwell, vol. 62(3), pages 227-242, July.
    8. Baiardi, Donatella & Manera, Matteo & Menegatti, Mario, 2014. "The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries," Energy: Resources and Markets 172443, Fondazione Eni Enrico Mattei (FEEM).
    9. Yih‐Luan Chyi & Yu‐Lun Liu, 2007. "Income Uncertainty and Wealth Accumulation: How Precautionary are Taiwanese Households?," Asian Economic Journal, East Asian Economic Association, vol. 21(3), pages 301-319, September.
    10. Bande, Roberto & Riveiro, Dolores & Ruiz, Freddy, 2021. "Does Uncertainty Affect Saving Decisions of Colombian Households? Evidence on Precautionary Saving," MPRA Paper 106771, University Library of Munich, Germany.
    11. Durmaz, Tunç, 2016. "Precautionary Storage in Electricity Markets," Discussion Papers 2016/5, Norwegian School of Economics, Department of Business and Management Science.
    12. Eeckhoudt, Louis & Schlesinger, Harris, 2008. "Changes in risk and the demand for saving," Journal of Monetary Economics, Elsevier, vol. 55(7), pages 1329-1336, October.
    13. Haliassos, Michael & Hassapis, Christis, 2001. "Non-expected Utility, Saving and Portfolios," Economic Journal, Royal Economic Society, vol. 111(468), pages 69-102, January.
    14. Mario Maggi & Umberto Magnani & Mario Menegatti, 2006. "On the relationship between absolute prudence and absolute risk aversion," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 29(2), pages 155-160, November.
    15. Mervyn Allister King, 1993. "Debt Deflation: Theory and Evidence," FMG Discussion Papers dp175, Financial Markets Group.
    16. Andrew B. Abel & Stavros Panageas, 2020. "Precautionary Saving in a Financially-Constrained Firm," NBER Working Papers 26628, National Bureau of Economic Research, Inc.
    17. van der Ploeg, F., 1989. "Risk aversion, intertemporal substitution and consumption : The CARA-LQ problem," Discussion Paper 1989-53, Tilburg University, Center for Economic Research.
    18. Di Giannatale, Sonia & Roa, María José, 2016. "Formal Saving in Developing Economies: Barriers, Interventions, and Effects," IDB Publications (Working Papers) 8107, Inter-American Development Bank.
    19. Susanne Soretz, 2003. "Stochastic Pollution and Environmental Care in an Endogenous Growth Model," Manchester School, University of Manchester, vol. 71(4), pages 448-469, July.
    20. Emilio Fernandez-Corugedo, 2004. "Consumption Theory," Handbooks, Centre for Central Banking Studies, Bank of England, number 23, April.

    More about this item

    Keywords

    decent work; labour uncertainty; consumption; precautionary savings; ELCA; Colombia;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:92717. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.