Perceived uncertainty as a key driver of household saving

Natalia Levenko

International Review of Economics & Finance, 2020, vol. 65, issue C, 126-145

Abstract: The paper studies the determinants of household saving in Europe with particular focus on the impact of labour income uncertainty. Panel data models are estimated on aggregate national-level data for 22 European countries in 1996–2017 using system GMM. The household saving rate is highly persistent and is driven in large part by income growth and by changes in labour income uncertainty, which can be dissected into two components: realised uncertainty and expectations about future uncertainty. Credit availability, interest rates, inflation, and other macroeconomic and expectational variables have little or no effect on saving.

Keywords: Household saving rates; Financial crisis; Labour income uncertainty; Precautionary saving; Consumer expectations; System GMM (search for similar items in EconPapers)
JEL-codes: E12 E21 E24 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056019301960
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:65:y:2020:i:c:p:126-145

DOI: 10.1016/j.iref.2019.10.005

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().