Unemployment Risk, Precautionary Savings, and Moonlighting in Russia
AbstractUsing a panel of 3,039 Russian households over the period 1994-96, this paper tests the precautionary savings hypothesis and investigates whether multiple job holding attenuates the need for precautionary savings. A measure of earnings variability based on the subjective probability of primary job loss of household heads is used as a proxy for risk. We find that risk strongly affects savings, although this effect is limited to those households whose head holds only one job. These findings are robust to different measures of savings and model specifications, and highlight the role of moonlighting as a self-insurance mechanism that individuals can use to smooth consumption in the presence of fluctuating earnings.
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Bibliographic InfoPaper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 232.
Date of creation: 01 Jun 1999
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precautionary savings; earnings variability; moonlighting;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
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- Sergei Guriev & Barry W. Ickes, 2000. "Microeconomic Aspects of Economic Growth in Eastern Europe and the Former Soviet Union, 1950-2000," William Davidson Institute Working Papers Series 348, William Davidson Institute at the University of Michigan.
- Maxim Bouev, 2001. "Labor Supply, Informal Economy and Russian Transition," William Davidson Institute Working Papers Series 408, William Davidson Institute at the University of Michigan.
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