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Saving behaviour and earnings uncertainty: Evidence from the British Household Panel Survey

  • Alessandra Guariglia
Part of the Population Economics book series (POPULATION)

Abstract

For the first time, this paper uses a panel data set, the British Household Panel Survey, to analyse saving behaviour in Britain. One objective is to test the precautionary saving hypothesis, according to which households save to self-insure against uncertainty. Our results show that in accordance with this hypothesis, various measures of uncertainty based on earnings variability have a statistically significant effect on households’ saving decisions. Moreover, in accordance with the life cycle model, households save more if they expect their financial situation to deteriorate.

Keywords

Precautionary saving uncertainty earnings variability 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2003

Authors and Affiliations

  • Alessandra Guariglia
    • 1
  1. 1.Department of EconomicsKeynes College, University of Kent at CanterburyCanterburyUK

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