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

  • Clemente De Lucia

    (Ministry of Economics and Finance)

  • Mara Meacci

    ()

    (Ministry of Economics and Finance)

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    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.

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    File URL: http://lipari.istat.it/digibib/Working_Papers/WP_54_2005_DeLucia_Meacci.pdf
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    Paper provided by ISTAT - Italian National Institute of Statistics - (Rome, ITALY) in its series ISAE Working Papers with number 54.

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    Length: 32 pages
    Date of creation: Aug 2005
    Date of revision:
    Handle: RePEc:isa:wpaper:54
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    13. Bagliano, Fabio-Cesare & Bertola, Giuseppe, 2007. "Models for Dynamic Macroeconomics," OUP Catalogue, Oxford University Press, number 9780199228324, March.
    14. Murphy, Kevin M & Topel, Robert H, 2002. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 88-97, January.
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    16. Guiso, Luigi & Jappelli, Tullio & Pistaferri, Luigi, 2002. "An Empirical Analysis of Earnings and Employment Risk," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(2), pages 241-53, April.
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