Consumption Smoothing under Labor Market Uncertainty: Do Household Characteristics Impact Saving?

35 Pages Posted: 10 Oct 2019 Last revised: 12 Oct 2019

See all articles by Sarah Kroeger

Sarah Kroeger

University of Notre Dame

Chad D. Cotti

University of Wisconsin - Oshkosh; University of Connecticut - Department of Agricultural and Resource Economics

Date Written: August 27, 2019

Abstract

This study uses a household-level panel dataset to measure the ability of households to smooth consumption during periods of labor market uncertainty. We find a larger consumption response to both income and market uncertainty among households with moderately low levels of income and with female heads. While households are on average quite adept at smoothing consumption in response to both economic uncertainty and income fluctuations, we find evidence that not all consumption is forward looking: poverty is associated with myopic consumption and households above poverty display signs of credit constraints.

Keywords: Consumption Smoothing, Household Choice, Uncertainty

JEL Classification: D12, D14, E21, E32

Suggested Citation

Kroeger, Sarah and Cotti, Chad D., Consumption Smoothing under Labor Market Uncertainty: Do Household Characteristics Impact Saving? (August 27, 2019). Available at SSRN: https://ssrn.com/abstract=3444528 or http://dx.doi.org/10.2139/ssrn.3444528

Sarah Kroeger (Contact Author)

University of Notre Dame ( email )

3078 Jenkins and Nanovic Halls
Notre Dame, IN 46556-7000
United States
5746316317 (Phone)

Chad D. Cotti

University of Wisconsin - Oshkosh ( email )

800 Algoma Blvd
Oshkosh, WI WI 54901
United States

University of Connecticut - Department of Agricultural and Resource Economics ( email )

1376 Storrs Road, Unit 4066
Storrs, CT 06269
United States
9202034660 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
16
Abstract Views
147
PlumX Metrics