Precautionary Saving and Social Insurance

R Glenn Hubbard, Jonathan Skinner and Stephen Zeldes

Journal of Political Economy, 1995, vol. 103, issue 2, 360-99

Abstract: This paper argues that a life cycle model can replicate observed patterns in household wealth accumulation after counting explicitly for precautionary saving and asset-based, means-tested social insurance. The authors demonstrate that social insurance programs with means tests based on assets discourage saving by households with low expected lifetime income. In addition, they evaluate the model using a dynamic programming model. Assuming common preference parameters across lifetime income groups, the authors are able to replicate the empirical pattern that low-income households are more likely than high-income households to hold virtually no wealth. Copyright 1995 by University of Chicago Press.

Date: 1995
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (740)

Downloads: (external link)
http://dx.doi.org/10.1086/261987 full text (application/pdf)
Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JPE for details.

Related works:
Working Paper: Precautionary Saving and Social Insurance (1994)
Working Paper: Precautionary Saving and Social Insurance
Working Paper: Precautionary Saving and Social Insurance
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:ucp:jpolec:v:103:y:1995:i:2:p:360-99

Access Statistics for this article

More articles in Journal of Political Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().