Saving flows and debt payments along the life-cycle in Mexican households

Owen Ceballos Mina

Working Paper Series Sobre México from Sobre México. Temas en economía

Abstract: This paper provides a semi-parametric characterization of financial sources along Mexican families' life-cycles. A synthetic household panel is constructed by using seven household surveys for the 2000-2012 period, and to estimate a partially linear model of savings and of debt payments. Results show that Mexican families do use higher levels of credits at early ages and higher levels of savings when older. By the end of the life-cycle, households' savings flows are relatively high and not similar to those predicted by the life-cycle standard model. The paper also identifies that debt payments reach a maximum at a household head´s age of about 45 years old, which is 5 years earlier than the maximum of household´s income level and 15 years earlier than the maximum of its saving level. These results are in line with the previous knowledge that in Mexico there are important liquidity restrictions at the early stages of family live, and that households' precautionary savings show up after the maximum income flow is reached

JEL-codes: D12 E21 (search for similar items in EconPapers)
Date: 2014-09-02
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:smx:wpaper:2014003

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