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

48 Pages Posted: 19 Aug 2016

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, Maria Christina 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

Maria Christina Rossi (Contact Author)

University of Torino ( email )


Dario Sansone

Georgetown University ( email )

Washington, DC 20057
United States

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