Does Job Insecurity Affect Household Consumption?

Andrew Benito ()
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Andrew Benito: Banco de España

No 225, Working Papers from Banco de España

Abstract: The paper confronts a key implication of the precautionary model of saving/consumption, using micro-data on British households. The results provide support for the key proposition that job insecurity affects consumption. A one standard deviation increase in unemployment risk for the head of household is estimated to reduce consumption by 2.7 per cent. This effect is greater for the young, those without non-labour income and manual workers—for whom precautionary effects might be expected to be stronger a priori. Consumer durables purchases are also found to be inversely related to unemployment risk.

Keywords: Consumption; precautionary saving; job insecurity (search for similar items in EconPapers)
JEL-codes: D12 E21 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2002-10
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Citations: View citations in EconPapers (2)

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http://www.bde.es/f/webbde/SES/Secciones/Publicaci ... o/02/Fic/dt0225e.pdf First version, October 2002 (application/pdf)

Related works:
Working Paper: Does job insecurity affect household consumption? (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:0225

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