The Saving and Employment Effects of Higher Job Loss Risk

Ragnar Juelsrud and Ella Getz Wold

No 2019/17, Working Paper from Norges Bank

Abstract: In this paper we use Norwegian tax data and a novel natural experiment to isolate the impact of job loss risk on saving behavior. We find that a one percentage point increase in job loss risk increases liquid savings by roughly 1.2 - 2.0 percent. Further, we show that employment falls in non-tradable industries not directly affected by the shock, also after controlling for intersectoral linkages and lower demand from affected industries, consistent with the household demand channel of recessions.

Keywords: Precautionary savings; household finance; recessions (search for similar items in EconPapers)
JEL-codes: D14 E20 E21 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2019-10
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (2)

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https://hdl.handle.net/11250/2652985

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Persistent link: https://EconPapers.repec.org/RePEc:bno:worpap:2019_17

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