Precautionary Savings and the Self-Employed: Does Uncertainty Magnitude Matter?

48 Pages Posted: 19 Aug 2016

See all articles by Mariacristina Rossi

Mariacristina Rossi

University of Turin, Esomas

Dario Sansone

Georgetown University

Date Written: July 19, 2016


Precautionary savings have often been analyzed with regard to its impact on current savings. This work focuses instead on the impact of uncertainty on savings under bequest form. We thus turn the focus on estimating whether and to what extent income variability does have an effect on post-mortem savings. We approximate the post-mortem savings with the closest dedicated savings, which is savings in term insurance, a lump sum inherited at the death of the subscriber. Furthermore, we test whether the intensity of the income variance or the riskiness of the job type - such as self-employment - matters more in the choice. Our results show that, even after controlling for income uncertainty, self-employment status is one of the most relevant variables affecting term insurance ownership.

Keywords: precautionary savings, bequest, term insurance, self-employment

JEL Classification: D91, E21, G11

Suggested Citation

Rossi, Mariacristina and Sansone, Dario, Precautionary Savings and the Self-Employed: Does Uncertainty Magnitude Matter? (July 19, 2016). Netspar Discussion Paper No. 07/2016-026. Available at SSRN: or

Mariacristina Rossi (Contact Author)

University of Turin, Esomas ( email )

Corso Unione Sovietica
Torino, Torino 10100

Dario Sansone

Georgetown University ( email )

Washington, DC 20057
United States

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