TY - JOUR
T1 - Unemployment risk and buffer-stock saving
T2 - An empirical investigation in Japan
AU - Bessho, Shun ichiro
AU - Tobita, Eiko
PY - 2008/8
Y1 - 2008/8
N2 - The purpose of this paper is to investigate, using micro data, the strength in Japan of the precautionary saving motive. While numerical simulations suggest the economic importance of precautionary saving, the empirical evidence is mixed. In this paper, we apply the buffer-stock saving model and focus on the effect of unemployment risk on wealth accumulation. We find that uncertainty has a positive and statistically significant effect on the wealth-to-income ratio, and that buffer-stock savings account for 6 or 15 percent of net financial assets. Housing loans and expenditures associated with children decrease this ratio.
AB - The purpose of this paper is to investigate, using micro data, the strength in Japan of the precautionary saving motive. While numerical simulations suggest the economic importance of precautionary saving, the empirical evidence is mixed. In this paper, we apply the buffer-stock saving model and focus on the effect of unemployment risk on wealth accumulation. We find that uncertainty has a positive and statistically significant effect on the wealth-to-income ratio, and that buffer-stock savings account for 6 or 15 percent of net financial assets. Housing loans and expenditures associated with children decrease this ratio.
KW - Buffer-stock saving
KW - Unemployment risk
UR - http://www.scopus.com/inward/record.url?scp=44449099083&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=44449099083&partnerID=8YFLogxK
U2 - 10.1016/j.japwor.2007.03.001
DO - 10.1016/j.japwor.2007.03.001
M3 - Article
AN - SCOPUS:44449099083
SN - 0922-1425
VL - 20
SP - 303
EP - 325
JO - Japan and The World Economy
JF - Japan and The World Economy
IS - 3
ER -
