Saving and Job-Loss Risk: Evidence from Italy

Andrew Clark (), Conchita D'Ambrosio and Anthony Lepinteur ()
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Andrew Clark: Paris School of Economics
Conchita D'Ambrosio: University of Luxembourg
Anthony Lepinteur: University of Luxembourg

No 19043, IZA Discussion Papers from IZA Network @ LISER

Abstract: Job insecurity produces uncertainty for workers, and likely affects their subsequent behaviour. We here ask whether the risk of job loss affects savings decisions. We analyse individual-level data from the Italian Survey on Household Income and Wealth, and consider the 2012 Fornero reform that reduced firing costs in large firms in Italy as a natural experiment. Greater job insecurity increases savings. In line with standard models of precautionary savings, this savings reaction to future job-loss risk is larger for workers who are more risk-averse.

Keywords: job insecurity; precautionary saving; risk aversion; Italy (search for similar items in EconPapers)
JEL-codes: D14 D91 J63 (search for similar items in EconPapers)
Date: 2026-10
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