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Does job security matter for consumption? An analysis on Italian microdata

Author

Listed:
  • Clemente De Lucia

    (Ministry of Economics and Finance)

  • Mara Meacci

    () (Ministry of Economics and Finance)

Abstract

This 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.

Suggested Citation

  • Clemente De Lucia & Mara Meacci, 2005. "Does job security matter for consumption? An analysis on Italian microdata," ISAE Working Papers 54, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  • Handle: RePEc:isa:wpaper:54
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Consumption; precautionary saving; job security; two-step twosample estimation. JEL Classification: D12; E21; C42.;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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