Unemployment Risk, Precautionary Savings, and Moonlighting in Russia
Using 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.
|Date of creation:||01 Jun 1999|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 734 763-5020
Fax: 734 763-5850
Web page: http://www.wdi.umich.edu
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:wdi:papers:1999-232. 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: (Laurie Gendron)
If references are entirely missing, you can add them using this form.