Precautionary Savings and Income Uncertainty: Evidence from Japanese Micro Data
This paper tests the existence of precautionary savings using subjective or self-reported measures of income uncertainty drawn from Japanese household data (primarily from those in their 30s). Two subjective measures are tested: one concerning labor earnings and the other concerning public pension benefits. The results show that, among either nuclear family households or households that do not receive income transfers from parents, there exist precautionary savings due to uncertainty concerning public pension benefits. As the respondents are primarily in their 30s, we find that those households start to save based on precautionary motives early in their lives. The finding that the effect of public pension uncertainty concerning savings is manifested in nuclear family households suggests that intergenerational risk-sharing reduces risk and therefore wealth accumulation. Precautionary savings are found to take the form of relatively low-risk assets; no precautionary savings are found in securities. No evidence has been found for precautionary savings being motivated by uncertainty over labor earnings when economic prospects are utilized as the measure of labor income uncertainty.
Volume (Year): 21 (2003)
Issue (Month): 3 (October)
|Contact details of provider:|| Postal: |
Web page: http://www.imes.boj.or.jp/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Miles S. Kimball, 1989.
"Precautionary Saving in the Small and in the Large,"
NBER Working Papers
2848, National Bureau of Economic Research, Inc.
- Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
- Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1992.
"Earnings Uncertainty and Precautionary Saving,"
CEPR Discussion Papers
699, C.E.P.R. Discussion Papers.
- Saito, Makoto & Shiratsuka, Shigenori, 2003. "Precautionary Motives versus Waiting Options: Evidence from Aggregate Household Saving in Japan," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 21(3), pages 1-20, October.
- Mark Kazarosian, 1997.
"Precautionary Savings-A Panel Study,"
The Review of Economics and Statistics,
MIT Press, vol. 79(2), pages 241-247, May.
- Martin Browning & Annamaria Lusardi, 1996.
"Household Saving: Micro Theories and Micro Facts,"
96-01, University of Copenhagen. Department of Economics.
- Starr-McCluer, Martha, 1996.
"Health Insurance and Precautionary Savings,"
American Economic Review,
American Economic Association, vol. 86(1), pages 285-95, March.
- Zhou, Yanfei, 2003. "Precautionary saving and earnings uncertainty in Japan: A household-level analysis," Journal of the Japanese and International Economies, Elsevier, vol. 17(2), pages 192-212, June.
- Christopher D. Carroll & Andrew A. Samwick, 1998.
"How Important Is Precautionary Saving?,"
The Review of Economics and Statistics,
MIT Press, vol. 80(3), pages 410-419, August.
- Christopher D. Carroll & Andrew A. Samwick, 1993. "How important is precautionary saving?," Working Paper Series / Economic Activity Section 145, Board of Governors of the Federal Reserve System (U.S.).
- Christopher D. Carroll & Andrew A. Samwick, 1995. "How Important is Precautionary Saving?," NBER Working Papers 5194, National Bureau of Economic Research, Inc.
- Engen, Eric M. & Gruber, Jonathan, 2001. "Unemployment insurance and precautionary saving," Journal of Monetary Economics, Elsevier, vol. 47(3), pages 545-579, June.
- Karen E. Dynan, 1993. "How prudent are consumers?," Working Paper Series / Economic Activity Section 135, Board of Governors of the Federal Reserve System (U.S.).
- repec:cup:cbooks:9780521663731 is not listed on IDEAS
- Sandmo, Agnar, 1970. "The Effect of Uncertainty on Saving Decisions," Review of Economic Studies, Wiley Blackwell, vol. 37(3), pages 353-60, July.
- Dynan, Karen E, 1993. "How Prudent Are Consumers?," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 1104-13, December.
When requesting a correction, please mention this item's handle: RePEc:ime:imemes:v:21:y:2003:i:3:p:21-52. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kinken)
If references are entirely missing, you can add them using this form.