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

Clemente De Lucia and Mara Meacci ()
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Clemente De Lucia: Ministry of Economics and Finance
Mara Meacci: Ministry of Economics and Finance

No 54, ISAE Working Papers from ISTAT - Italian National Institute of Statistics - (Rome, ITALY)

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.

Keywords: Consumption; precautionary saving; job security; two-step twosample estimation. JEL Classification: D12; E21; C42. (search for similar items in EconPapers)
Pages: 32 pages
Date: 2005-08
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Citations: View citations in EconPapers (6)

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