Locus of Control and Savings

Deborah Cobb-Clark, Sonja de New and Mathias Sinning ()

No 7837, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper analyzes the relationship between individuals' locus of control and their savings behavior, i.e. wealth accumulation, savings rates, and portfolio choices. Locus of control is a psychological concept that captures individuals' beliefs about the controllability of life events and is a key component of self-control. We find that households with an internal reference person save more both in terms of levels and as a percentage of their permanent incomes. Although the locus-of-control gap in savings rates is largest among rich households, the gap in wealth accumulation is particularly large for poor households. Finally, households with an internal reference person and average net worth hold significantly less financial wealth, but significantly more pension wealth, than otherwise similar households with an external reference person.

Keywords: wealth accumulation; locus of control; non-cognitive skills; asset portfolios; savings (search for similar items in EconPapers)
JEL-codes: G02 G11 I31 R21 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2013-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Forthcoming - published in: Journal of Banking and Finance, 2016, 73, 113-130

Downloads: (external link)
https://docs.iza.org/dp7837.pdf (application/pdf)

Related works:
Journal Article: Locus of control and savings (2016)
Working Paper: Locus of Control and Savings (2014)
Working Paper: Locus of Control and Savings (2013)
Working Paper: Locus of Control and Savings (2013)
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:iza:izadps:dp7837

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().