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Earnings uncertainty, precautionary saving, and moonlighting in Russia

Author

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  • Alessandra Guariglia

    ()

  • Byung-Yeon Kim

    ()

Abstract

Using a panel of 3,522 Russian households over the period 1994-2000, this paper tests the precautionary saving hypothesis, according to which households save to self-insure against uncertainty. We proxy uncertainty with a measure of earnings variability based on the subjective probability of primary job loss of household heads, and find that this variable generally has a strong positive effect on saving, supporting the precautionary saving hypothesis. This effect is however reversed for those households whose head holds more than one job, highlighting the role of moonlighting as a self-insurance mechanism that can be used in alternative to precautionary saving to smooth consumption in the presence of fluctuating earnings. Our findings are robust to different measures of uncertainty and estimation procedures. Copyright Springer-Verlag 2004

Suggested Citation

  • Alessandra Guariglia & Byung-Yeon Kim, 2004. "Earnings uncertainty, precautionary saving, and moonlighting in Russia," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(2), pages 289-310, June.
  • Handle: RePEc:spr:jopoec:v:17:y:2004:i:2:p:289-310
    DOI: 10.1007/s00148-004-0184-3
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    File URL: http://hdl.handle.net/10.1007/s00148-004-0184-3
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    Citations

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    Cited by:

    1. Andrew Atherton & João R. Faria & Daniel Wheatley & Dongxu Wu & Zhongmin Wu, 2016. "The decision to moonlight: does second job holding by the self-employed and employed differ?," Industrial Relations Journal, Wiley Blackwell, vol. 47(3), pages 279-299, May.
    2. Delphine M. Irac & Camelia Minoiu, 2007. "Risk insurance in a transition economy," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15(1), pages 153-173, March.
    3. repec:eme:jespps:jes-04-2016-0074 is not listed on IDEAS
    4. Dmitry Kulikov & Karsten Staehr, "undated". "Microeconometric analysis of household saving in Estonia: income, wealth, financial exposure," Bank of Estonia Working Papers wp2007-8, Bank of Estonia, revised 03 Feb 2015.
    5. Irac, D. & Minoiu, C., 2006. "Risk Insurance in a Transition Economy: Evidence from Rural Romania," Working papers 154, Banque de France.
    6. Jacob Nunoo & Kwabena Nkansah Darfor & Isaac Koomson & Abigail Arthur, 2018. "Employment security and workers’ moonlighting behavior in Ghana," Journal of Economic Studies, Emerald Group Publishing, vol. 45(1), pages 144-155, January.
    7. Pouliakas, Konstantinos & Panos, Georgios & Zangelidis, Alexandros, 2009. "The Inter-Related Dynamics of Dual Job Holding, Human Capital and Occupational Choice," MPRA Paper 16859, University Library of Munich, Germany.
    8. 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.
    9. repec:eee:touman:v:39:y:2013:i:c:p:37-49 is not listed on IDEAS
    10. Evren Ceritoğlu, 2013. "The impact of labour income risk on household saving decisions in Turkey," Review of Economics of the Household, Springer, vol. 11(1), pages 109-129, March.
    11. repec:iza:izawol:journl:2017:n:356 is not listed on IDEAS
    12. repec:aea:aecrev:v:107:y:2017:i:7:p:1778-1823 is not listed on IDEAS

    More about this item

    Keywords

    Precautionary saving; earnings uncertainty; moonlighting; D12; E21; P20;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • 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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