Intergenerational Precautionary Saving in Europe

47 Pages Posted: 9 May 2019

See all articles by Francesco Scervini

Francesco Scervini

University of Pavia

Serena Trucchi

Ca Foscari University of Venice

Date Written: May 9, 2019

Abstract

This paper examines the interaction between altruism towards offspring and precautionary savings. It investigates whether increased uncertainty in children labor income fosters savings of parents. We first construct a two-periods and two-generations model, to underline which are the mechanisms behind the intergenerational precautionary motive for savings. Second, we exploit two micro datasets to test the main theoretical implications. Parents’ consumption turns out to respond to the offspring’s income risk. This result is robust to the presence of family fixed effects and to many alternative empirical specifications.

Keywords: precautionary savings, consumption, income risk, offspring

JEL Classification: D13, D15, C23

Suggested Citation

Scervini, Francesco and Trucchi, Serena, Intergenerational Precautionary Saving in Europe (May 9, 2019). University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 13/WP/2019 . Available at SSRN: https://ssrn.com/abstract=3385274 or http://dx.doi.org/10.2139/ssrn.3385274

Francesco Scervini

University of Pavia ( email )

Corso Strada Nuova, 65
27100 Pavia, 27100
Italy

HOME PAGE: http://https://francescoscerviniphd.wordpress.com/

Serena Trucchi (Contact Author)

Ca Foscari University of Venice

Dorsoduro 3246
Venice, Veneto 30123
Italy

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